Pound hits 26-year high against US dollar

The pound, which has also gained against the euro, climbed as high as $2.066 in early trading on Tuesday before slipping slightly to $2.064. The last time the pound had such strength against the dollar was in 1980, although the pound remains some way off the $2.446 mark it reached then. When UK rates (currently 5.75%) are higher than US rates (4.75%), investors tend to exchange dollars for pounds to benefit from better rates of return. 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 t...