The pound bounced today after three consecutive weeks of losses, though signs of instability in the governing Conservative party and uncertainty around Brexit talks checked gains.
After last week's 0.25% interest rate rise by the Bank of England - its first in over a decade - investors have been watching closely for any developments that could affect the bank's plans for further rate hikes.
The biggest factor is the outcome of Brexit talks, Bank of England governor Mark Carney said last week.
Analysts said that Brexit news is still a depressant on sterling and investors are not buying sterling because they are still worried about what Brexit really means.
Sterling was up 0.2% against the dollar today at $1.3112, having fallen for three weeks in a row.
Against the euro, it was up 0.4% at 88.42 pence.
The Bank of England said last week it expected to raise rates just two more times over the next three years, an announcement that drove the biggest single-day loss for sterling since the week after the Brexit vote in June 2016.
Mark Carney said over the weekend that Britain's economy would grow more slowly in the short term if the country failed to secure a future trading deal with Europe, and that uncertainty over the progress of divorce talks was impeding British business.
Almost two in three British firms will have contingency plans in place by March for the possibility that Britain leaves the EU without a deal, the Confederation of British Industry said yesterday.
The UK government is struggling to contain a scandal about sexual harassment that has embroiled some of Britain's political elite, raising concerns about Prime Minister Theresa May's ability to lead the country towards a good deal.
