Sterling rose from a one-week low on Thursday as the dollar slumped towards a session low, although renewed concerns over the state of play in Brexit negotiations checked the British currency's gains.
Despite sterling's weakness this week, it is still up nearly 3 percent against the dollar this year as investors have ramped up bets that the Bank of England may raise interest rates more than previously forecast.
The dollar index, which measures the greenback against a basket of six major currencies, was down 0.22 percent at 89.805. Through Wednesday, the index gained nearly 2 percent since hitting a three-year low of 88.253 on Friday.
Sterling rose 0.2 percent to $1.3940 on Thursday, rising from an intraday low of $1.3858 and nearing a post-Brexit vote high of above $1.43 hit in late January.
It is up nearly half a percent from the day’s lows.
Against the euro, the pound was broadly steady around 88.36 pence and was stuck in well-worn trading ranges.