Sterling Pound
The UK pound has hit its highest level against the US dollar in 26 years.
The pound has gained on the perception that US interest rates will be cut this week and UK interest rates will be left unchanged next week.
When UK rates are higher than US rates, investors are encouraged to exchange dollars for pounds to benefit from better rates of return.
The pound rose as high as $2.066 in earlier trading, before paring gains slightly to $2.064.
The pound also gained against the euro.
Many analysts expect the Federal Reserve, the US central bank, to cut interest rates by a quarter of a percentage point on Wednesday, in an attempt to limit the impact of a housing market slowdown.
The Fed cut its main interest rate by half a percentage point to 4.75% last month, after problems in the housing market were seen to be spreading to the wider economy.
House prices have been falling and the number of foreclosures has surged in recent months after the Fed raised rates in an attempt to slow inflation.
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