by Sam Hewitt
Sterling has strengthened +0.38% to touch 1.2838 today, its highest in 1 week, and less than a cent from its highest since March 7th 2008, or almost 7 years.
The pound to euro exchange rate has jumped, because the UK's trade deficit fell to a 17-month low in December, while UK factory output rose more than forecast.
Pound climbs, as UK trade deficit narrows
Sterling has climbed today, because the UK's deficit of goods and services with the rest of the world fell to just -£1.4 billion in December, the least since June 2013.
This lifted the pound, because it signals that the UK is coming closer to meeting the Coalition government's goal of re-orienting to an export-driven economy.
Sterling also lifts, as UK factory output beats forecasts
In addition, the pound to euro exchange rate has also risen today, because UK factory output rose +0.7% last month, the most in 7 months, and more than the +0.3% forecast.
Sterling rose as a result of this data, because it signals that the UK's economic recovery continues.
For instance, Maeve Johnston, economist at Capital Economics notes that these are "encouraging signs that the UK's recovery still had some momentum towards the end of 2014."
"As things stand, then, 2015 should be a better year for manufacturers and exporters," she added.
