Sterling hit its lowest in 11 days against the dollar on Monday but held relatively steady against the euro, deriving some support from merger and acquisition news.
Slight support for the pound came from sterling-positive merger news as French bank Credit Agricole said it was considering a take-over bid for British bank Alliance and Leicester.
Currency markets have been keeping a close eye on UK M&A activity as flows have generally been positive for sterling with news centring around foreigners snapping up British companies.
"One factor you have to be aware of with sterling at the moment is M&A deals," said Adam Cole, senior currency strategist at Royal Bank of Canada.
By 1415 GMT sterling was steady against the dollar at $1.8796 after earlier hitting its lowest since May 11 at $1.8636 as dollar strengthened. Last week, the pound hit a one-year high against the dollar above $1.90
Sterling held steady against the euro at 68.08 pence - well away from last week's 5-1/2 month highs at 67.52 pence.