Sterling burst through its September 1992 high to a 26-year peak of $2.0133 yesterday and New York's Dow Jones Industrial Average recorded a fresh all-time high.
Sterling burst through its September 1992 high to a 26-year peak of $2.0133 yesterday and New York's Dow Jones Industrial Average recorded a fresh all-time high, in another day of drama in global financial markets.
The pound, which made the symbolic $2 mark on Tuesday for the first time in the nearly 15 years since the days leading up to its exit from the European Exchange rate mechanism, moved yesterday morning to levels not seen in the last quarter-century.
In 1981, the year the pound was last at these levels, Ronald Reagan succeeded Jimmy Carter as US president.
Sterling continued to be supported yesterday by news on Tuesday of an unexpected leap in annual UK consumer prices index inflation to 3.1%, which has stoked fears of higher interest rates.
The pound was comfortably above $2 throughout yesterday. Sterling had by last night slipped back a little below its September 1992 high of $2.01 and was trading around $2.0080 - up more than one-quarter-of-a-cent on its close in London on Tuesday.
Its second consecutive $2-plus close was also notable. On the one day in February 1991 and two occasions in 1992, on September 1 and 8, on which the pound closed higher than $2, it ended the next session below this level.
The Dow finished last night at a record close of 12,803.84, up 30.8 points on the session, having earlier touched an all-time trading high of 12,838.46. It was buoyed by profit figures from investment bank JP Morgan Chase.
In contrast to Wall Street, the UK stock market finished weaker for a second straight session yesterday. The expectations of higher UK interest rates which supported the pound weighed on the FTSE-100 index of leading shares, which ended down 48.4 points at 6449.4.
Minutes of the Bank of England Monetary Policy Committee's April 4 and 5 meeting yesterday cemented the view, which had developed on Tuesday, that another rise in UK base rates next month from their current level of 5.25% was a done deal.
