Sterling traded lower against the dollar on Thursday, erasing earlier gains, as the British currency tried to snap a two-day losing streak.
The pound last traded at $1.2898, down 0.24 percent, against the greenback. It has been down more than 14 percent since the Brexit vote.
Earlier, the British currency rose, as better-than-expected UK factory data and a modest revival in risk appetite with the rise in some global stocks encouraged investors to book profits.
The British pound's outlook, however, remained bleak after Britain's shock vote to bolt the European Union, with some analysts expecting it to drop to $1.20 in coming months as the Bank of England prepares to ease monetary policy.
U.K. manufacturing and industrial output data for the three months to May were slightly better than expected, but they remained weaker from the previous month. The data, however, has been largely discounted by markets as they cover a period before the Brexit vote.
"Sterling action is nothing more than a technical flow," said Mark McCormick, North American head of FX strategy, at TD Securities in Toronto.