UK data released on Friday showed an increase in activity in the dominant British service sector which makes up a large part of the economy.
The important services purchasing managers index (PMI) printed a much higher than expected number in April at 52.9 in April, versus the 52.5 forecast, and up from March’s 52.4. This is the fastest expansion in eight months.
The upbeat news boosted GBPUSD 0.2 percent to a session high of $1.5570.
The data comes a day after the construction PMI also rose more than expected. The building sector was the main drag on the economy in the past six months and it is hoped that this latest increase will help improve the UK GDP numbers.
The recent improved economic should encourage the Bank of England to hold its ground on further quantitative easing.
Recent dollar weakness has also helped buoy sterling, which had its best monthly performance in April since October 2011.
However further gains in the pound were capped as investors wait for the all important US nonfarm payrolls report due later today. A positive number will boost the dollar and could keep sterling weighed down.