Investing.com - The pound pushed higher on Wednesday as market sentiment continued to stabilize after last week’s shock U.K. vote to exit the European Union.
GBP/USD was up 0.43% at 1.3400, off the 31-year low of 1.3122 set on Monday, a level not seen since 1985.
The two-day selloff in sterling seen on Friday and Monday was the largest in recent history.
Sterling has tumbled amid fears that Brexit could hit investment in the U.K. economy, threaten London's role as a global financial capital and usher in a period of slower global economic growth.
Political uncertainty in Britain, where Prime Minister David Cameron resigned after the referendum, added to fears over the outlook for the economy.
EU leaders were to continue to discuss the implications of Brexit at a summit in Brussels on Wednesday.
On Tuesday, EU leaders said there would be no special deals from former members of the trading bloc.
The pound also gained ground against the euro, with EUR/GBP sliding 0.35% to 0.8264, pulling back from Monday’s two-year peaks of 0.8378.
The euro was little changed against the dollar, with EUR/USD at 1.1072, holding above Friday’s three-and a-half month lows of 1.0909.
The euro remained under pressure as uncertainty over Brexit continued to cloud the outlook for the whole EU.
The safe haven yen remained supported, with USD/JPY sliding 0.35% to 102.41 after falling to lows of 99.15 on Friday, the weakest level since November 2013.
EUR/JPY was down 0.29% at 113.38.
The dollar had risen after data on Tuesday showing that U.S. first quarter growth was revised higher, but diminished expectations for interest rates hikes by the Federal Reserve in the wake of Brexit still weighed.
Traders remained focused on whether Japan would take any action to weaken the yen if it continued to strengthen.
Japanese Prime Minister Shinzo Abe on Wednesday pledged to use all available policy tools to protect the economy from the fallout from Brexit.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, eased 0.14% to 96.04.