The pound rocketed through the $2.10 barrier yesterday for the first time since 1981, as traders continued their assault on the greenback and oil struck yet another new high, edging ever closer to the triple-digit mark.

The pound rocketed through the $2.10 barrier yesterday for the first time since 1981, as traders continued their assault on the greenback and oil struck yet another new high, edging ever closer to the triple-digit mark.

Analysts said sterling was expected to remain above the $2 mark for at least six months, although it was likely to come under pressure on expectations of an interest rate cut in the coming months.

The pound's heightened level makes Boeing jets, Californian wine and family holidays to Disneyland a lot cheaper for UK and European residents.

Currency analysts said the pound was expected to hold its strength at about $2.08 through November, before slipping to around $2.06 after three months.

Although interest rates are widely expected to be kept on hold by the Bank of England's Monetary Policy Committee today, Lutz Karpowitz, an analyst at Bayern, said: "We feel the momentum for sterling will begin to fade toward the end of November".

By April next year, analysts predicted, sterling would likely fall to $2.03 and then dip to about $1.99 in a year's time.

Nonetheless, one pound yesterday bought $2.1042 and one euro bought $1.4658, also a record.

Gavin Foster, at London Capital Group, yesterday said: "The pound-dollar has broken through $2.10 with ease and only brave men are touting levels of where the near-term high will be."

However, the rise in the pound is primarily the story of the dollar's weakness.

Paul Robinson, a currency strategist at Barclays Capital, said: "This isn't a sterling story momentum is clearly against the dollar."

The dollar has generally been drifting south against most major global currencies, including sterling, for almost a decade - although the greenback has declined faster during the George W Bush administration than in any president's term since Richard Nixon cut the dollar's ties to gold in 1971.

That decline has gathered pace in recent months as investment dollars are being diverted out of the US into fast-growing emerging markets, because traders see far more lucrative returns in these markets.

Investors, plagued by nagging doubts about the health of the US economy, have also been factoring in the likelihood that the Federal Reserve will cut interest rates further - in spite of the expectation of a near-term pause.

The dollar's record weakness is also - at least partly - responsible for the dramatic rises in oil prices, which have soared nearly $30 since August, and gold has approached a lifetime high.

Investors, wary of global equity markets where the full blow of the credit crunch has yet to be felt, see commodities as a surer bet.

Again underpinned by dollar weakness and concerns about Middle East tensions, crude oil yesterday was poised to breach the $100 barrier after hitting a record $98.62, before simmering back to $96.77.

London Brent crude also hit a new peak of $95.19, but settled back to $93.88.

Angus Campbell, at London Capital, said: "Oil has been driven higher largely by speculators and hedge funds, who are heavily leveraging themselves in an attempt to take the commodity above the $100 a barrel mark."

Investors were also alarmed by a report yesterday morning, in which a top Chinese government official said China would shift its foreign currency reserves away from the "weak" dollar, further eroding confidence in the currency and sending it to new lows.

That helped crank up the price of crude to another record. US stockpiles dropped last week by 821,000 barrels, the Energy Department said, a smaller decline than many expected - but enough to galvanise fears of a shortage.

The recent surge has brought oil near its inflation-adjusted all-time high of $104.35, reached in 1864, the year of the Pennsylvania oil boom.

This time, demand - also fuelled by exploding growth in China and a steady increase from the US - has been another major driver behind a more-than-quadrupling in the oil price since 2002.

In unusually urgent tones yesterday, the International Energy Agency warned that demand for oil imports by China and India will almost quadruple by 2030 and could create a supply "crunch" as soon as 2015 if oil producers did not step up production, if energy efficiency fails to improve and if demand from the two countries is not dampened.

Over the past two years, China and India have accounted for about 70% of the increase in energy demand and the world's energy needs would increase 55% by 2030, the IEA report said.

According some economic theorists, higher energy prices can discourage consumers from spending on other products, which in turn slows growth.

Meanwhile, gold, too, set a fresh record yesterday of more than $840 an ounce, but came back down to $831.40.

Investors often buy gold as a safe haven against economic trouble, geopolitical turmoil and as an inflation.