The strengthened on Tuesday after the Reserve Bank of Australia kept interest rates on hold and hinted it was in no hurry to ease monetary policy further on signs of reasonably strong economic growth.
Sterling recovered further from three-week lows versus the dollar set on Monday following two newspaper polls on Tuesday that showed Britons narrowly favor remaining in the European Union. The results were in contrast to surveys released on Monday which showed more voters favored leaving the EU.
The dollar hovered near four-week lows against a basket of currencies as traders speculated when the Federal Reserve may raise interest rates in the wake of comments from Fed Chair Janet Yellen on Monday and a poor May jobs report on Friday.
The RBA as expected kept the cash rate at a record low 1.75 percent, after cutting last month for the first time in a year.
"It suggests a patient RBA. It doesn't mean an immediate cut in rates following the one in May," said Thierry Albert Wizman, global interest rates and currencies strategist at Macquarie Limited in New York.
Many traders were disappointed that the RBA statement offered no hints on further easing, which led them to exit earlier bets on an imminent rate cut, sending the Aussie higher.
The Aussie was the biggest gainer among major currencies, hitting $0.7458, its highest since May 6. It rose nearly 1 percent against the yen and the euro.
Sterling also posted strong gains, rising 0.6 percent at $1.4545 after hitting a three-week low on Monday on worries about the outcome of the June 23 "Brexit" referendum.
Investors and policy-makers have warned a British exit from the EU would hurt the global economy and roil financial markets.
Tuesday's poll results soothed some fears, but uncertainty remained high.
The pound's one-month volatility against the U.S. dollar has surged to its highest since early 2009 during the global credit crisis, Reuters data showed.
On the other hand, the dollar was subdued after Fed Chair Yellen on Monday did not specify whether the Fed would raise rates in the coming months.
The dollar index was marginally lower at 93.85, holding above a near four-week trough of 93.745 set on Monday.
The greenback tumbled on Friday when the May U.S. nonfarm payrolls report showed the slowest job growth in more than five years in May, quashing expectations for a near-term rate hike.