Sterling rose off three-week lows against the dollar today as British Prime Minister Theresa May said the government would seek to speed up ratification of its Brexit withdrawal deal with the European Union if time gets too tight.
Time is running out for May to persuade the EU to amend the Brexit deal and then get British lawmakers to approve it, before Britain is scheduled to leave the bloc on March 29.
The deadlock and delays over the terms of Brexit have heightened fears among financial investors of a no-deal and disorderly, economically disruptive departure even if the majority of British lawmakers want to avoid one.
May told lawmakers today to hold their nerve over Brexit and give her more time to negotiate a deal acceptable to both the European Union and the British parliament.
She also said that parliament, which last month resoundingly rejected her accord for satisfying neither pro-Brexit MPs' wish for a clean break nor pro-EU lawmakers' call for continued close ties, would not vote on a revised deal this week.
British media have reported a fresh vote is not expected until late February at the earliest.
The pound rose 0.2% to $1.2876 - its weakest since January 21.
Against the euro, sterling held its own and was unchanged on the day at 87.695 pence per euro.
Analysts noted that the price of buying options to protect against further volatility in the pound had fallen in recent days.
But they said that the move lower followed a period in which investor demand for protection against wild price swings as the Brexit date approaches has been strong.
Britain's economy is also suffering from Brexit-related uncertainty - it grew last year grew at its slowest rate since 2012, data showed.
"It is very difficult to argue with the notion that Brexit related uncertainty has now had a significant economic impact," Rabobank analysts said in a note.