HiFx attributed this to the political turmoil in the US and anticipation of a further quantitative easing announcement on Wednesday evening.
At the time of writing, sterling was trading at 1.6125 against the dollar.
The foreign exchange provider said this move could well prove short-lived depending on the level of QE announced at the Federal Open Market Committee (FOCM) meeting.
Jason Gaywood, senior FX consultant at HiFX, claimed the question is really not 'if' there is going to be more stimulus in the US but 'how much'.
He said: "If the Fed decide on adding a mere $500bn or less to the financial system then this is unlikely to be enough to continue weakening the dollar. In fact the dollar may even strengthen as the level of QE is not as great as earlier feared by the market.
"Couple this with ongoing concerns in the UK regarding the impact of public sector spending cuts and the chance of a downgrading of the Q3 UK GDP numbers, we could well be witnessing a false dawn for USD purchasers.
"Let’s not forget that we are still likely to see further fiscal easing in the UK – if not tomorrow then most likely in Q1 2011."
