Sterling rose today and was poised for its first weekly gain in three weeks as investors cut some short bets on the British currency.
But concerns that a Brexit deal with the European Union at a summit later this month is unlikely capped gains today.
Against the dollar, the pound was broadly steady at $1.2334 and was a shade weaker against the euro at 88.96 pence.
It was down 0.7% against the dollar from a one-week high above $1.24 hit in the previous session.
The British government on Wednesday proposed an all-island regulatory zone in Ireland to cover all goods, replacing the so-called backstop arrangement, and was waiting for an official response from its European counterparts.
But a European Parliament Brexit group believes the new proposals "do not represent a basis for an agreement", according to the draft of a statement seen by Reuters ahead of release later in the day.
A senior European Union official said yesterday that Johnson's last-ditch Brexit proposal "can't fly".
Just 28 days before the UK is due to leave the EU, both sides are positioning themselves for a delay or a disorderly no-deal Brexit.
Boris Johnson says he wants a deal but insists there can be no delay beyond the end of the month.
