LONDON: Sterling rose to its strongest against a basket of currencies since the height of the 2008 financial crisis on Wednesday, extending a bullish run since the end of January in the face of calls for it to weaken.
Manufacturing numbers on Tuesday were the latest in a robust data series that has underlined Britain's better performance on growth than most of Europe, prompting investors to wind back in bets for a rise in Bank of England rates to next February.
A number of major banks have recommended selling sterling against the dollar in the past two weeks but the currency has proved fairly resilient, resisting a push below $1.50.
On Wednesday, it gained around 0.3 percent against the dollar to trade at $1.5292. Against the euro, the pound gained 0.4 percent to 73.925 pence, its strongest since January 2008.
"One thing is that the UK data, in line with other manufacturing numbers across Europe, has not been too bad in the past few weeks," said Michael Sneyd, a strategist with French bank BNP Paribas in London.
"The rates market had also gone a long way out and has now come back a bit. On cable (sterling/dollar) our models also indicated at the end of January that it was undervalued. They now see fair value at around $1.5250."
Against the Bank of England's trade-weighted currency basket, of which the biggest constituent parts are the euro, dollar and Chinese yuan, sterling rose above 90 for the first time since October 2008.
It also hit a five-week high of 183.20 yen, up 0.5 percent on the day against the Japanese currency.
With little in the calendar for Wednesday, the next big event for sterling is Thursday's Bank of England Inflation Report, with any warning on the chances of a rate move soon seen as a trigger for more gains for the pound.
"Tomorrow's Inflation Report presents upside risks for sterling given dovish market pricing (on the outlook for interest rates)," Citi said in a note to clients on Wednesday.
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