Sterling rebounded from a two-month low today to trade back above $1.27.

The gain came after Bank of England's chief economist Andy Haldane signaled he would weigh in behind a rise in interest rates in the second half of this year. 

The pound had earlier sunk beneath $1.26 for the first time since the middle of April as investors worried about Prime Minister Theresa May struggling to find the support she needs for her government.

But it reversed those falls as the chief economist's speech was published, trading up 0.6% on the day to reach as high as $1.2710. 

Against the euro, sterlingt rose 0.4% to 87.78 pence. 

Haldane's comments ran contrary to those of Governor Mark Carney, who had driven the pound lower yesterday by saying "now was not the time" to begin to raise rates. 

The UK's blue chip FTSE 100 index, which tends to fall as sterling rises because most of its multinational constituents earn in foreign currencies, hit a session low after the comments.

The Queen's speech, which featured promises from the prime minister to listen more closely to businesses' concerns about Britain leaving the European Union, appeared to have little impact on the currency today.

Sterling has fallen around 15% against the dollar since the vote for Brexit a year ago. 

At a time of unprecedented political uncertainty, May is under increasing pressure to secure a deal with Northern Ireland's Democratic Unionist Party (DUP) to prop up her government after nearly two weeks of talks.