The pound rose 0.3% today, still boosted by last week's general election victory for Boris Johnson's pro-Brexit Conservative party, even in the face of weak PMI data.
The prime minister's win saw the pound rally because the market perceives his party as the most able to end the Brexit uncertainty which has harmed the UK economy.
But UK PMI data for the services and manufacturing sectors show that in November British businesses endured their worst downturn since mid-2016.
The pound was little affected by the data. Having risen as much as 0.7% in early London trading, it was last up 0.3% at $1.3370.
Against the euro, sterling was broadly flat at 83.335 pence.
Over the weekend, Conservative politicians repeated their pledge to bring the UK out of the European Union by January 31 and reach a new trade deal with the EU by the end of 2020.
Boris Johnson intends to re-submit the Withdrawal Agreement Bill to parliament on Friday for ratification before Christmas.
"Generally, market participants are still relatively optimistic over the outlook for the pound following the strong Tory majority - that's still encouraging demand for the pound even at these higher levels," said MUFG currency analyst Lee Hardman.
Lee Hardman said that when negotiations are underway after the January 31 deadline investors' focus will shift back to UK fundamentals.
"If the data continues to disappoint then the risks will increase further that the Bank of England may have to cut rates early next year," Hardman said, describing the current level of growth as "uncomfortably weak" for the central bank.
The Bank of England meets on Thursday. It is due to publish its financial stability report and systemic risk survey results later this evening.
