Sterling rose 0.3% against the US dollar, reaching local highs last seen before the US\/Iran conflict. It traded above 1.35 during Wednesday\u2019s North American session.<\/p>\n
Demand for UK debt issuance was described as strong, with large orders for both Treasury offerings and issuance from large financial institutions. UK domestic data releases were limited ahead of Thursday\u2019s trade and industrial production figures.<\/p>\n
Attention turned to Bank of England speakers, including Governor Andrew Bailey. Comments from MPC member Catherine Mann referred to being \u201cactive\u201d, including the possibility of \u201ca big rise or cut or long hold\u201d.<\/p>\n
On technical indicators, GBP\/USD had a bullish RSI reading, pushing above 60. Support was placed below 1.3450, with limited resistance seen up to mid-February peaks around 1.37.<\/p>\n
We are seeing the Pound gain strength, now trading around 1.3550 against the Dollar. These levels are the highest since before the market jitters caused by geopolitical tensions in the first quarter. This rally is supported by surprisingly strong demand for newly issued UK government debt.<\/p>\n
The market is reacting positively to robust demand for UK gilts, with a recent 10-year auction showing a bid-to-cover ratio of 2.8, the best we’ve seen since late 2025. With UK inflation for March coming in at 2.9%, it remains stubbornly above the Bank’s target. This reinforces the view that interest rates will need to stay higher for longer.<\/p>\n
While the data calendar is light until we see industrial production figures, the main risk comes from Bank of England speakers. Governor Bailey recently signaled a commitment to keeping policy restrictive, suggesting the BoE is in no rush to cut rates. This hawkish tone could provide further support for the Pound.<\/p>\n
Technical indicators like the Relative Strength Index (RSI) are firmly bullish, suggesting upward momentum may continue. Given this, traders could consider buying call options with strike prices approaching the 1.37 level, which aligns with highs seen back in February. This strategy allows for participation in the upside while defining risk.<\/p>\n
We see solid support forming below the 1.3450 mark. A sustained break below this level would challenge the current bullish outlook. Traders holding long positions might view this level as a point to reassess, or could use put options with strikes below 1.3450 to hedge against a potential reversal.<\/p>\n
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