The pound continues to gain against the dollar

Monday afternoon saw the GBP/USD cross break the 1.5903 barrier, its highest levels since the beginning of March. A recent run of improved data from the UK was helping support the pound, with investors expecting less dovish Bank of England minutes on Wednesday and few negative surprises in the annual UK budget.

"There could be a slightly less dovish tinge to the MPC (monetary policy committee minutes) and in the budget there is no real reason to downgrade growth again. We have got stability coming through in the data released this year," said Jane Foley, senior currency strategist at Rabobank.

Less dovish BoE minutes could lower expectations that the BoE will resort to another round of asset purchasing to boost the UK economy. Further quantitative easing (QE) would be seen as a negative for sterling as it involves flooding the economy with cash in an attempt to stimulate growth.

The pound's rally extended gains from Friday when softer-than-expected U.S. inflation data boosted the pound against the dollar. With the gains the pound has been making over the last few days we could see rates reach $1.60 for the first time since November.

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