GBP/USD climbed toward 1.2450 but erased its daily gains. Economists at BBH note that the pair could test the May high near 1.2665 on a break past the December high near 1.2445.

The UK is still facing tight power markets as cold weather hits

“Sterling is trading lower near 1.2350 after making a new cycle high today near 1.2450 and just above the December high near 1.2445. Clean break above that would set up a test of the May high near 1.2665.”

“National Grid has asked some UK households to cut energy use today and is likely to extend that request to tomorrow due to a drop in wind power coupled with freezing temperatures across the nation. Of note, this emergency measure to reduce electricity demand was previously in test mode but has now gone live.”