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According to Reuters, sterling was up to $1.6235 after high oil prices added to worries about US growth.
Forex traders backed the pound as it moved close to last week's high of $1.6275, despite analysts pointing out sterling may be vulnerable.
Jane Foley, currency strategist at Rabobank, stated: "The market is fully priced for a late spring Bank of England [BoE] interest rate hike and sterling is vulnerable to bad news given so much is priced in."
If the BoE does increase the base rate - which currently stands at a record low of 0.5 per cent - in late spring then it will be the first rise in more than two years.
This comes after the euro surged by 0.2 per cent against sterling this morning off the back of figures released on Friday that showed the UK economy contracted by 0.6 per cent.
Posted by Clive Arneil
