Pound Sterling (GBP) is up modestly vs US Dollar (USD) on the session at writing after backing off slightly from the overnight peak just shy of 1.26—its highest level since the end of last year, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

GBP nears key 1.2610 resistance

"GBP is up a solid 1.4% on the week, lagging only the SEK among the major currencies. The UK’s trade position with the US—it runs a small bilateral deficit, with the only trade advantage for the UK coming in services—gives the pound some plot armour in the still developing tariff story. The BoE stressing a cautious approach to the policy outlook has been helpful over the past week as well."

"GBP/USD price action is constructive. Spot is trading at a YTD high this morning, with the late December peak at 1.2607 coinciding with the 38.2% retracement of the late 2024 sell-off in Cable at 1.2610. A push through the low 1.26s should pave the way for additional gains to the mid-1.27s. Support is 1.2550 intraday."