LONDON, Feb 18 - Sterling rose above $1.91 for the first time in more than 11 years on Wednesday as investors continued to dump dollars in favour of currencies with higher interest rates. Sterling pushed as high as $1.9128 in early trade, its highest since Britain withdrew from Europe's Exchange Rate Mechanism in September 1992. Its latest push higher means sterling has gained 12 cents against the dollar in the past month. "We are seeing a continuation of broad-based dollar selling," said David Mann, currency strategist at Standard Chartered Bank. "The UK is in a rate hiking cycle which is making sterling particularly attractive." Britain's key interest rate stands at 4.0 percent while the U.S. federal funds rate target is 1.0 percent. Traders were keeping a close eye on the minutes of the Bank of England's Monetary Policy Committee meeting, due at 0930 GMT, for clues on further rate rises ahead. Analysts expect the minutes to show a 9-0 vote in favour of raising interest rates earlier this month.
The dollar also slid to a fresh record low against the euro and its lowest in eight years against a basket of currencies. Sterling was steady against the euro at 67.45 pence , close to 11-month highs scaled on Tuesday. On a trade-weighed basis <=GBP>, sterling held firm at the previous session's 14-month high. Since the start of the year, the British currency has gained more than seven percent against the dollar and four percent against the euro.//