LONDON, July 24 Reuters Sterling gained on the euro on Wednesday after a survey showed British business activity this month was stronger than in euro zone economies, while it held steady on the dollar and tumbled against a rebounding Japanese yen.

The euro was last down 0.1 on the pound at 84.04 pence not far from its two year low of 83.84 pence hit earlier in July.

British business activity picked up this month, bolstered by the fastest manufacturing growth in two years and the strongest inflow of new orders since April 2023, PMI survey data showed Wednesday. In contrast, growth in euro zone business activity stalled.

The divergence in economic fortunes is being reflected by currency markets so far this morning, said Nick Rees, FX Market analyst at Monex Europe.

The pound has been supported in recent months by betterthan expected economic data, some stability from a new government, and also the Bank of England being slower to cut rates than some peers, including the European Central Bank, due to fears about sticky services inflation.

The BoE next meets in August, and markets see around a 45 chance of them cutting rates. Rees said Wednesday39;s data would do little to push the BoE towards or away from an August cut as it showed a mixed picture regarding the pass through from wages to inflation.

The pound was flat on the dollar at 1.29075.

Sterling39;s most dramatic move was against the Japanese yen, tumbling 0.55 to 199.67 yen, having been above 207 earlier this…