Analysts expect the pound to hit the two-dollar mark in the near future, after the unexpected increase in UK interest rates shot sterling higher against a whole basket of currencies.
Sterling is at a 15-month high against the US dollar, at $1.91:£1, and as the experts predict another jump from the Bank of England base rate of 4.75 per cent, the trend is expected to continue.
Sterling has also risen against the euro and the yen, helped by the fact that UK interest rates are higher than those in Japan and the European Union.
The high value of sterling has mixed implications for UK businesses and consumers. It makes UK exports more expensive on overseas markets, but it means companies buying raw materials in from abroad can get more for their money.
The pound is becoming more attractive to currency traders, but the dollar is losing its appeal - partly because the US Federal Reserve is expected to pause its cycle of raising interest rates.
Currency traders have been switching their reserves out of the dollar in the belief that the Fed may hold steady, or if it does raise rates again, signal that it will stop there.
Sterling last reached the $2 mark in September 1992, just before the "Black Wednesday" crisis, when currency speculators forced the UK government to withdraw the pound from the European Exchange Rate Mechanism.
If the pound does pass the $2 mark, currency experts believe it will be a reflection of the dollar's weakness across the globe.
