The pound edged higher today thanks to broad dollar weakness against its rivals as investors waited cautiously for developments on Brexit negotiations with less than two weeks before the UK is due to leave the European Union.
The British currency got off to a volatile start to the week, shedding 0.5% in late London trading yesterday.
The falls came after John Bercow, the speaker of Britain's parliament, said Prime Minister Theresa May's Brexit deal could not be voted on again unless a different proposal was submitted.
Traders have steadily reduced their fears that Britain will crash out of the EU without a deal in recent weeks.
But Bercow's move means more uncertainty in the short term as the government races to convince opposing lawmakers to back May's deal or request for an extension.
"The predominant notion adopted by the market is that as long as the worst case scenario of hard Brexit is avoided by delaying Brexit, the pound is a buy on dips," Rabobank strategists said in a note.
That view was shared by Morgan Stanley strategists who said the pound remained a buy on dips.
The US bank's positioning tracker showed broader market positions on the pound was broadly neutral.
Against the dollar, the pound firmed 0.1% higher at $1.3267. It had rallied to a nine-month high against the greenback to nearly $1.34 last week and is down less than a percent from those highs.
Against the euro, the pound was broadly steady at 85.55 pence.