On Monday, the pound rose to session highs after the publication of data showing that manufacturing activity in the UK rose in October at the fastest pace in 16 months, improving the prospects for national economic growth in the fourth quarter.
GBP/USD pair peaked at 1.5498 from 1.5451 the day before publication.
According to Markit, its index of business activity in the manufacturing sector in the UK jumped last month to 55.5 from 51.8 in September. Economists had expected an increase to 55.3.
According to a Markit survey, the UK economy can grow twice faster in the last quarter of the year than in the third quarter.
"The survey points to quarterly growth of about 1%, significantly better than performance in recent months," - said Rob Dobson, senior economist at Markit.
Sterling also rose against the euro; EUR/GBP pair fell 0.25% to 0.7117 from 0.7135 yesterday.
In the Eurozone, data showed on Monday that the manufacturing sector noted an increase in October. The final value of the Eurozone manufacturing PMI index rose to 52.3 from 52.0 in September.
The French factory industry noted a modest rise, with an increase in manufacturing PMI to 50.6, yet manufacture business activity in Germany fell to three-month low, manufacturing PMI reducing to 52.1 from 52.3 in September.
The USD, which tracks the US currency against a basket of six major rivals, fell 0.09% to 96.91.
Investors are focused on Friday's US employment data for October, which may give further clarification on the possible timing of raising interest rates.
Last week, the Federal Reserve kept interest rates at current levels, but indicated that it might raise interest rates at its December meeting.
Meanwhile, later today Institute of Supply Management was to publish data on manufacturing activity in the United States.
Also on Monday, euro rose to session highs against the dollar, moving above $ 1.10 after data showed that the US manufacturing sector expanded in October at the slowest pace in two years.