The yuan and Australian currencies win thanks to a survey in China on factories

TOKYO (Reuters) – An unexpected improvement in Chinese factory activity boosted the yuan and the Australian dollar on Monday and boosted global investor confidence, helping the dollar gain against the yen.

According to an official survey released on Sunday, factory activity in China experienced unexpected growth for the first time in four months in March, signaling that the government could begin stimulus measures in the world's second-largest economy.

The official Purchasing Managers Index (PMI) reached 50.5 in March [CNPMIB=ECI] 49.2 in February, its lowest level in three years, exceeding the median forecast of 49.5 for economists.

This pushed the Australian dollar, often considered as an indirect indicator of China's economic outlook, from 0.15% to 0.7107 dollar.

The Chinese yuan also gained 0.2% in offshore trading at $ 6.711 per dollar.

The US dollar rose 0.15% to 110.93 yen, extending its lead to last week's low of 109.70 last week.

"It seems that political support is helping to support the Chinese economy," said Ayako Sera, market economist at the Sumitomo Mitsui Trust Bank.

"But if the policy measures are likely to curb a further slowdown, they are unlikely to accelerate the economy. If the markets were embarrbading with overly optimistic prices, we could see a certain setback on the road, "she said.

All the data in the region were not optimistic, with the Bank of Japan's tankan showing a deterioration of the business climate among large Japanese companies and diminishing trade in South Korea.

The euro hardly changed to $ 1.122 after slipping to its lowest level in three weeks at $ 1.1210.

The governor of the Dutch central bank, Klaas Knot, one of the most prominent hawks of the European Central Bank 's rate setting committee, said that it was clear interest would be lower than before the crisis, even after the normalization of the policy.

The pound has struggled at 1.3020 USD, near the trough of 1.2977 USD located near three weeks Friday and not far from last month's low of 1.2945 USD.

The exit of Britain from the European Union was in disarray after the defeat of the proposal of Brexit, proposed by the Prime Minister Theresa May, pushed the rival factions to leave without agreement, to launch in elections or to forge a much softer divorce.

Traders have also said that investors have reduced their sterling operations because it has become so difficult to predict the situation given the constant and sometimes mysterious evolution of the political situation.

"Monday will be another interesting day in parliament," said Seema Shah, senior global investment strategist at Principal Global Investors in London.

"If MPs are able to form a majority around a few motions – most likely the motion of the permanent customs union or a" popular vote "on the agreement reached, we could see the pound strengthen on hopes restored from a sweet Brexit. "

Positive risk sentiment helped boost emerging market currencies.

The Mexican peso gained 0.4% to 19.347 Australian dollars while the South African rand gained more than 1.2% to 14.317 dollars the dollar.

The Turkish lira fell 0.9% to 5,591 to the dollar after President AK Tayyip Erdogan's ruling AKP party is about to lose control of the capital Ankara for the first time in a local election.