Many are flat sterling having closed short cable (USD/GBP) positions overnight. The dollar in general has been retracing this morning from a technically overbought postion (cf. CHF, gold, oil) There has been less short covering in the euro.
Traders are shorting sterling at 1.4925 and above as there doesn't seem to be much appetite for a retest of $1.50 - so far the pound has tried to get above $1.50 three times over the past few days without success.
If there is any political / macro reason behind the minor strength in cable this morning it is that Brown seems to be fudging the tax cut issue a little after failing to get it to the centre of the G20 agenda - if Osborne's comments help in any way to make the public wary and Brown more careful with his unfunded cuts then they will be sterling positive absent any material policy announcement from Brown.
Update: we have now successfully - although gently - taken out $1.50 and the pound is trading around 1.5030, so those who affect such a concern about the cable rate should be thanking Osborne and the G19 for putting Brown back where he belongs (for the time being at least). Let's see if we hold the 5 day moving average and end the session above $1.50