Sterling firmed against the dollar and euro on Wednesday after a Bank of England policy maker said there was no rush to move UK interest rates.
David Walton, the newest Monetary Policy Committee member, told the Times newspaper that inflation could easily remain above the Bank's 2 percent target for some months while economic growth appeared to have recovered somewhat.
Sterling showed little reaction to weaker than expected UK consumer confidence figures that showed morale remained at a 2-1/2 year low of -8.0. Economists had expected the index to climb to -6.0.
"The market has not taken much notice of the (confidence) figures, people are instead focusing on what Walton said," said Dresdner Kleinwort Wasserstein currency strategist Tim Fox.
By 1511 GMT, sterling was trading at $1.7270, up nearly half a percent on the day.
"You have to remember the dollar has come a long way relatively quickly against a wide range of currencies so I don't think there is the same drive at the moment," said Simon Derrick, head of currency research at Bank of New York.