It follows from a difficult week where four-month lows were reported due to a number of concerns.
Primarily the discontent with Brexit negotiations and how the UK will be leaving the EU in March 2019 will be handled was thought to have affected it.
The exchange was also affected by the spring statement yesterday where the growth forecasts for 2018 were increased.
This is good news for the economy after years of economic growth being unchanged or worse.
It is currently predicted to be 1.5 per cent this year, up from 1.4 per cent predicted by the Office for Budget Responsibility (OBR) in the last statement in November.
The forecasts for 2019 and 2020 have stayed the same at 1.3 per cent.
It also announced that debt had fallen for the first time in 17 years in the UK.
Chancellor Philip Hammond explained it was a “turning point in the nation’s recovery from the financial crisis”.
OBR chairman Robert Chote addressed the issue of Brexit affecting the UK economy: “Overall the referendum vote does seem to have weakened the economy as we and most other forecasters expected, but not quite as much as we forecast back in November 2016.”
He warns not to “put too much weight” on economy predictions before and after the Brexit vote just yet.
Laura Parsons, currency analyst at TorFx commented: “The pound ticked slightly higher on Tuesday as the Office for Budget Responsibility (OBR) raised its 2018 growth forecasts.
“However, GBP/EUR failed to derive much benefit from the revision as the euro strengthened in response to comments from European Central Bank (ECB) policymaker Philp Lane.
“Lane asserted that there is ‘no concern’ about the current strength of the euro, and the common currency climbed accordingly.
She also explained how the pound could be affected by events later this week: “However, the GBP/EUR exchange rate could push back above the €1.13 level if ECB President Mario Draghi adopts a dovish tone in today’s speech in Frankfurt.
“The Eurozone is also due to publish final German inflation figures and Eurozone employment stats for the fourth quarter.”