The pound staged a rally on Thursday on hopes the UK government would consider elements of their radical tax cuts announced in the recent mini-budget.
GBP/USD surged over 160 pips to 1.1263 following reports there could well be a U-turn on tax cuts. Recent government comments indicated Liz Truss and Kswasi Kwarteng had dug in on their initial plans but breaking news at lunch time on Thursday suggested they could be set to drop some proposals.
There has been no official confirmation from the UK government so far.
Confidence in the UK government has been destroyed and the Prime Minister is facing a revolt by back bench MPs with some calling for her to quit.
Optimism around a potential U-turn was evident in a broad range of UK assets including domestic-facing equites and bonds.