Sterling edged up against the dollar on Thursday, reversing earlier losses as political chaos unfolded in the UK and as a Bank of England official's comments prompted a further scaling back of bets on a full percentage-point rate hike in November.
British Prime Minister Liz Truss is meeting Graham Brady, the head of the 1922 Committee of Conservative lawmakers, a source in Truss's Downing Street office said.
Truss is battling to retain her grip on power, a day after a second top minister quit and rowing and jostling broke out among her lawmakers in parliament.
Against this backdrop, the pound rose 0.5% to $1.1260 , having earlier traded 0.4% down. The pound was down just 0.13% at 87.23 pence per euro, pulling away from a one-week low at 87.57 pence.
"Given how the (finance minister Jeremy) Hunt policies have steadied the UK markets, I don't think anybody seriously expects him to be replaced, regardless of who replaces Truss," said Stuart Cole, head macroeconomist at Equiti Capital.
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