(Reuters) – The Sterling rose to its highest point against the Euro on Monday, February 20, 2020. This was due to rising expectations for rate increases and easing concerns about the economic effects of Omicron.

Analysts believe that the UK’s resistance to COVID-19 further restrictions has resulted in the currency strengthening since December.

Britain’s focus has been on distributing booster vaccines, which are now available to more than 60% of its population, rather than returning to locking down.

Investors have increased their expectations that the Bank of England would raise interest rates next month, following a shock December increase.

“We expect a solid November UK GDP report tomorrow of 0.4%, which will keep expectations alive of a Bank of England rate increase on February 3,,” ING analysts stated. They also noted that OIS market prices had an 80% chance of a 25 bps rise.

On Tuesday, a preliminary estimate for the UK’s gross domestic product (GBP) is expected.

At 0903 GMT Sterling fell 0.1% against the dollar, to $1.358. This is close to its high point since November 2021 when it was $1.3599.

After reaching its highest point since February 2020, 83.34 pence per Euro was 0.2% lower at 83.38 pence.

The pound entered 2022 “with a tailwind of cautious optimism; the market will be looking closely at Omicron data, and any immediate indication of Liz Truss’s focus areas, as an indication of the tone taken by the Bank of England in Q1,” Joe Tuckey, FX Analyst, Argentex said.

Following the resignation of David Frost as Brexit minister, Liz Truss was appointed Britain’s chief negotiator to the European Union on trade with Northern Ireland.

Truss indicated that before talks with EU over post-Brexit trade agreements, the United Kingdom is prepared to unilaterally take action to suspend customs inspections on goods coming to Northern Ireland.