The British pound moved sharply higher vis-à-vis the U.S. dollar today as cable tested offers around the US$ 2.0195 level and was supported around the $1.9950 level. Sterling has been quite volatile over the past several days as short-term funding rates have moved much higher. Bank of England Governor King canceled a visit to the West Midlands today to monitor events in London. The BoE auctioned off ₤10 billion in three-month liquidity today and the bid-to-cover ratio was 1.69%, higher than February’s 1.34% ratio and an indication that demand for short-term funding is significant. Many traders believe BoE will need to enact more substantial measures to soften interbank lending rates but this was rendered difficult by U.K. February annual consumer price inflation released today and confirmed a jump in price pressures to 2.5%, the fastest rise since May. Cable bids are cited around the US$ 1.9910 level. The euro weakened vis-à-vis the British pound as the single currency tested bids around the ₤0.7810 level and was capped around the ₤0.7885 level.