The pound was supported by the survey, published yesterday by the Chartered Institute of Purchasing and Supply (CIPS). Sterling hit an intra-day high of about $1.6920, its highest level against the greenback for nearly five years.
CIPS's headline purchasing managers' index (PMI) for the UK manufacturing sector, a measure of activity which includes output, new orders, employment, suppliers' delivery times and stocks of goods purchased, rose from 55.8 in March to 57.3 in April on a seasonally-adjusted basis.
The April PMI reading, which is well above the level of 50 deemed by CIPS to separate expansion from contraction, was the highest in five months and one of the best in the past three years.
CIPS's survey also signalled the joint-fastest rate of job creation in the sector in the last three years.
And the manufacturing output index surged to 61.9 in April, from 58.7 in March.
Rob Dobson, senior economist at survey compiler Markit, said: "The output index from the PMI survey suggests manufacturing output growth in the second quarter may even breach 1.5 per cent on its current tack."
However, he added: "The one sour point in the latest data is a further sharp slowdown in growth of investment goods new orders, a blow to hopes of achieving a rebalancing away from consumer-driven economic expansion."