The pound approached its highest level against the euro in 23 months on Friday, as investors expect the Bank of England to raise interest rates next week and follow a path of rapid monetary policy tightening in 2022.
Analysts said the Bank of England's aggressive stance will boost sterling, despite plans by the US Federal Reserve to pursue a tighter monetary policy, providing some protection for the dollar.
"Key interest rates rising by more than 25 basis points will help sterling if the Governor of the Bank of England can convince the market that the Bank has a plan," said analysts at Commerzbank.
(CNA)
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