Sterling climbed to $1.3290, taking a disappointing British construction survey in its stride and stabilising after an 11-percent plunge to a 31-year trough of $1.3122 a week ago in the wake of the Brexit vote.
Some traders say the impact could take longer to emerge given nothing concrete has been set after the referendum, including when and how that will happen.
"Various political decisions need to be taken in Europe in the next few months which can move sterling decisively. We believe Bank of England easing is likely in the second half of 2016, which may already have been priced in somewhat," UBS Wealth Management strategists said in a note.
"Our new forecast of $1.32 should therefore be seen as the mid-point of a wider range, reaching up to $1.38 on the upside, but also not ruling out moves below $1.30."
For the other major currencies, Brexit is starting to fade as a driver with nervousness soothed by promises of more stimulus and talk of UK corporate tax cuts to offset the shock of leaving the EU.
The euro stood at $1.1132, a little lower on the day, and flat against the yen at 114.20. The dollar was up 0.1 percent at 102.60 yen. <JPY=>