LONDON, March 29 Reuters The British pound hit its highest level against the dollar in eight weeks on Wednesday as worries about the health of the global financial system continued to ease.

The pound rose 0.1 against the dollar to 1.2359, its highest since Feb. 2. The euro rose 0.1 against sterling to 87.91 pence.

The pound39;s risksensitive nature means it was supported by the rebound in risk appetite amidst cooling concerns about the banking sector turmoil, according to George Vessey, FX and macro strategist at Convera.

Markets have been volatile in March following the collapse of U.S. tech lender Silicon Valley Bank SVB and the emergency takeover of Credit Suisse by banking rival UBS, raising fears of systemic stress that could lead to more bank failures.

But relief swept over markets this week after regional U.S. lender First Citizens BancShares bought the assets of SVB and the absence of fresh concerns helped lift confidence among investors.

Sterling is quite sensitive to riskon, riskoff moves, said Joe Tuckey, head of FX analysis at Argentex.

Things are looking finely balanced and if there39;s another leg down in U.S. equities you could see safe haven flows into the dollar and a leg back down in cable GBPUSD, he added.

Bank of England BoE Governor Andrew Bailey said on Tuesday the central bank was on alert amid global turmoil in the banking sector, but added Britain was not experiencing stress linked to the problems at SVB and Credit Suisse.

Bailey was…