LONDON: Sterling rose to its strongest against the euro since January 2008 in early trade on Wednesday, helped by a slightly stronger run of data that has prompted investors to bring 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 0.2 percent against both the dollar and the euro to trade as strong as 73.995 pence per euro and $1.5281.
"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 our models also indicated at the end of January that it was undervalued. They now see fair value at around $1.5250."
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