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Forex traders appear to have got behind sterling, which increased to $1.6139, its highest level since November 15th, Reuters reports.
Strong UK manufacturing purchasing managers' index data has added to further speculation of a possible rate rise.
What's more, March gilt futures have decreased following the announcement of the statistics as FLGH1 was 44 ticks down on the day at 116.89 by 09:36 GMT.
In addition to this, there was good news for the pound against the euro as the single currency fell to a session low of 85.10 pence.
This comes after sterling was down versus its US counterpart by 0.1 per cent yesterday morning, leading a London-based trader to point out the pound is beginning to run out of steam on the topside.
He added: "Short term, the market may be a little long, so small stop-loss orders are driving the move lower."
Posted by Greg Secker
