Sterling rose against the euro and dollar on Monday, getting some support from firm British housing data as relative calm returned to jittery markets.
Asking prices for homes in England and Wales rose an annual 12.2 percent this month, with inflation picking up from 11.5 percent in February, according to property website Rightmove.
The data suggests the housing market remains buoyant despite three interest rate hikes since August, potentially boosting the case for further monetary tightening from 5.25 percent.
Abating risk aversion in global markets, shown by rises in equities, also bolstered the pound, which had been heavily sold off earlier this month when investors exited risky carry trade investments in high yielders like sterling.
"Stock markets have stabilised over the past couple of days ... There was a feeling that maybe the pound had been oversold in early March and people at the moment are clearly taking the view that maybe there is a chance of a retest of the $1.96-1.97 area," said David Jones, chief markets analyst at CMC markets. "(The UK data) has all been fairly upbeat for now at least, so that's clearly helping the case for the pound bulls at the moment," he added.
By 1505 GMT, sterling was up 0.2 percent to $1.9450.
The euro was at 68.36 pence, 30 ticks below an eight-month high hit last week and matched in overnight trading. Sterling gained around 1 percent versus the yen and hit a one-week high of 103.1 on a trade weighted basis.
Sterling had been a key beneficiary of carry trades where borrowing in low-yielders like the yen is used to fund purchases of higher-return units such as the pound. As a result, it has sold off sharply during the carry unwind of recent weeks.
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