Bonus for tourists as sterling eyes $2

Updated 12.29 Mon Apr 16 2007

Keywords: dollar, Sterling

US-bound holidaymakers are in for a bonus as the pound soared to its highest level against the US dollar for more than 14 years.

Sterling hit $1.993 and is likely to break through the key $2 level before the end of the week, according to analysts.

Sterling last hit the level in mid-September 1992, just before the pound was kicked out of the European Exchange Rate Mechanism on Black Wednesday

GFT Global Markets' currency expert, Martin Slaney, believes the pound is set to hit $2 amid active markets and with signs that the interest rate may be on the cards for the UK.

Mr Slaney said: "This could well prove to be a very significant week for sterling.

"Momentum is certainly with the pound right now and there's every chance that the higher volatility we are likely to see this week will take us above two US dollars."

Sterling last hit $2 in mid-September 1992, just before the pound was kicked out of the European Exchange Rate Mechanism on Black Wednesday.