Investing.com - The pound rose to four-year highs against the dollar on Monday, buoyed by expectations that the Bank of England could raise interest rates as soon as next year as the economic recovery gains momentum.
GBP/USD hit 1.6823, the strongest since November 2009 and was last up 0.05% to 1.6755.
Cable was likely to find support at 1.6643, Friday’s low and resistance at 1.7000.
The pound has strengthened since the BoE raised its U.K. economic growth forecast for 2014 to 3.4% from 2.8% on Wednesday and indicated that it may raise interest rates next year.
The bank updated its forward guidance on bank rates, saying it will not raise rates until the spare capacity in the U.K. economy has been fully absorbed, which it sees happening in 2015.
The dollar remained under pressure after data on Friday showed that U.S. manufacturing output unexpectedly fell in January, as inclement winter weather acted as a drag on growth.
The poor data did little to alter expectations that the Federal Reserve will continue to gradually taper its asset purchase program.
Elsewhere, EUR/GBP hit 0.8158, the lowest since January 2013 and was last up 0.12% to 0.8185.
Demand for the euro continued to be underpinned as Friday’s better-than-expected euro zone fourth quarter growth data eased concerns that the European Central Bank could tighten monetary policy at its next meeting.