Sterling vaulted to a one-year high against the euro and a five-year peak against the yen on Wednesday as an upward revision to Britain's economic growth record bolstered the case for higher UK interest rates.
Official data showed Britain's economy grew faster than expected in 2003, putting the world's fourth largest economy well ahead in the growth league compared with its European neighbours.
Technical momentum also bolstered the pound, which triggered automatic buy orders as it sped past last week's high against the euro and trend-line resistance at 205 yen. Sterling also rose to its highest on a trade-weighted basis since December 2002.
"The market was gunning for key chart levels in sterling," said Trevor Dinmore, foreign exchange strategist at Deutsche Bank. "The data was supportive of sterling and feeds into the interest rate story which has been a key driver of sterling gains this year."
The Bank of England raised borrowing costs this month for the second time in three months in a bid to cool consumer demand and a booming housing market.
At 1500 GMT, sterling was trading just short of session highs against the euro at 66.80 pence, having earlier risen to 66.70, its highest level since February 2003.
It kept a firm footing against a broadly-rebounding dollar at $1.8900. Last week, sterling rose to $1.9140, its highest since Britain's ejection from Europe's Exchange Rate Mechanism in September 1992.
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