The pound edged up above $1.31 on Monday as the dollar skidded lower but gains for the British currency were capped by fresh angst over Brexit and doubts about the economy.
Weak economic data and deepening political uncertainty over the government's Brexit position hammered sterling last week and sent it to 10-month lows.
The currency has in recent sessions, however, eked out some gains against the dollar and the euro despite weaker-than-expected retail sales and softer inflation data.
Next week the Bank of England meets, and markets are giving an 80 percent chance that it will increase interest rates.
At 08:00 GMT on Tuesday the pound was up 0.1 percent against the dollar at $1.3106 and up 0.1 percent against the euro at 89.09 pence, a three-day high.
With no clear sense of direction, sterling remains exposed to moves in other currencies.
It fell to a three-week low against a resurgent yen on Monday after the Japanese currency received a boost from reports the central bank was contemplating scaling back its stimulus.