The pound jumped to its highest in three weeks against a broadly weaker dollar as the US currency suffered from worries that Donald Trump would win the US presidential election.
Sterling climbed after news that London's High Court will deliver its verdict tomorrow on whether the UK parliament as a whole - rather than just the ruling Conservative government - must invoke Article 50.
This will begin the formal process of leaving the European Union.
Sterling rose further during Prime Minister Theresa May's weekly questions from parliament, at which she said the UK government would do its best to secure a good deal for the agriculture sector when Britain leaves the EU.
Some analysts said it would be hard to imagine a scenario in which MPs would vote against triggering Brexit, even if Britain's High Court rules that triggering Article 50 requires parliamentary approval on Thursday.
The currency rose as much as 0.8% to $1.2350, its highest since October 10.
It has climbed 1.2% this week, boosted on Monday by news that Bank of England Governor Mark Carney will extend his tenure to 2019.
Mark Carney's decision eased concern about threats to the Bank's independence in an uncertain political environment, where worries over a "hard" UK exit from Europe's single market have sent sterling tumbling.
The pound barely reacted to the latest purchasing managers' construction index, which showed growth hitting a seven-month high in October.
Political jitters have mostly overshadowed economic data in recent months.
Investors are also looking to tomorrow's Bank of England policy decision and quarterly inflation report.
Sterling's fall - almost 20% since the vote for Brexit - is expected to push the Bank of England to raise its inflation forecasts to show a bigger overshoot of its price target than at any time since it gained independence in 1997.
Meanwhile, the pound was steady against the euro today - at 90.33 pence.
