The pound has also benefited from the weaker dollar, and rose above $1.38 for the first time since October 2021.Meanwhile, gold briefly broke through the $5,300 an ounce level, as investors sought out safe-haven investments.Sterling has climbed nearly 3% in the last four trading days, from around $1.34, reflecting a sharp unwind in dollar positions as investors respond to growing policy risk in the US, said George Vessey, lead currency and macro strategist at the cross-border payments firm Convera.Several factors are weighing on the US currency simultaneously, but the common thread is erratic US policymaking, which has revived the dollar’s risk premium and pushed investors to rotate out of dollar‑denominated assets or hedge their exposure.He said for the pound, “the move looks convincingly bullish and could mark the beginning of a shift into a higher trading range, with the psychological $1.40 level now the next upside marker”. The FX options market reinforces this momentum. Positioning for a stronger pound versus the dollar is now the most bullish over a one‑week horizon since 2019, while longer‑dated risk reversals have surged back to levels last seen during the tariff shock last April. More broadly, currency volatility has returned with force. The G10 one‑month implied/realised volatility spread is at its widest in over a year, signalling that traders are bracing for more turbulence ahead.