Weak economic data helped to keep sterling up against the euro and the dollar.

The pound started the day worth $1.89015 and €1.47950.

The dollar was held down by weak housing data - which it thought could delay any further interest rate rises from the federal reserve.

Figures from the US National Association of Realtors showed sales of existing homes fell by 4.1 per cent to a two-year low.

July also saw sales of new homes fall by 2.7 per cent.

The cooling housing market has even led some analysts to predict an interest rate cut next year - further bringing down the dollar.

The euro was still held down by yesterday's weak investor confidence figures.

In the UK, new CBI figures show manufacturing demand at its strongest level in 20 months.

CBI chief economic adviser Ian McCafferty said: "The outlook remains encouraging for UK manufacturers. But it is disappointing that export orders have not improved more, given the current revival of the Eurozone economy, our principal export market."

He also noted that UK firms had faced a squeeze on profits to absorb surging energy and raw material costs.

This led to inflation warnings as companies may pass on costs to consumers - although international competition may hold this off to some degree.