Sterling rose further today as traders welcomed Prime Minister Theresa May's announcement that she would begin cross-party talks with the opposition Labour party as a signal that Britain will end up with "softer" exit from the European Union.
The pound gained 0.3% in early London trading to $1.3187, its highest since March 28.
The British currency had slipped below $1.30 on Friday on growing fears of a no-deal Brexit.
Against the euro, sterling gained 0.1% to 85.135 pence today – a one-week high.
May said yesterday she would seek another Brexit delay to agree an EU divorce deal with Labour, a last-ditch gambit to break an impasse over Britain's departure that has angered many in her party.