The pound was stronger on Thursday against all its main rivals continuing the upward path seen in January, the currency's best monthly performance against the dollar since May 2009.
Sterling appeared to be getting a boost from rising prospects of a better Brexit deal, a modest economic performance and expectations of further interest rate increases.
Not just dollar weakness
Much of the UK currency's 5.06% rise against the dollar in January, however, has been written off as simply dollar weakness - a sentiment not wholly warranted, according to Samuel Tombs at Pantheon Macroeconomics.
"Some of sterling's appreciation undoubtedly reflects investors reappraising the US government's policy towards the greenback, following the Treasury Secretary's comment that 'a weaker dollar is good for us'," he said.
"But sterling hit a seven-month high against the euro last week and it has appreciated against nearly every other major currency.
"So, this is a story of genuine sterling strength too."
While the economy has performed moderately well, the Bank of England has become a little more hawkish. Earlier this week BoE governor Mark Carney said the central bank was to refocus on its core objective of price stability and bringing inflation back to target.
His mildly-hawkish tone suggested a Bank ready to withdraw more monetary stimulus in the coming months, said Jane Foley at Rabobank.
She added: "That said, with almost all other G10 central banks likely to reduce policy accommodation this year, it is difficult to anticipate that the market’s current expectation that the BoE will hike once more this year can lift sterling much further."
The political backdrop has improved a little also. This week's leaked document on the likely economic hit from Brexit prompted the prime minister to admit the government was still seeking a better deal than any of the likely scenarios analysed in the leaked papers.
Analysts at Investec said: "While we agree that sterling’s level still prices in generous Brexit related downside risks, we are still wary of possible hitches in UK/EU talks."
They added: "Also the Tories’ problems are not over and we expect investors to consider carefully the implications of a possible Corbyn-led government. Sterling is not a one-way bet."
On Thursday, sterling climbed again. The pound gained 0.47% against the dollar to $1.4255, and gained 0.83% to Y156.21 versus the Japanese yen. Against the euro sterling climbed 0.18% to €1.1453.