The British currency hit a 1-1/2 year low earlier this week as May battles to get the Brexit deal she negotiated with the European Union through parliament in a vote scheduled for Tuesday with the treaty facing heavy opposition from lawmakers both for and against Britain leaving the bloc.

But a broadening dollar weakness on Thursday against most of its rivals on the back of falling US Treasury yields offered some respite to the battered pound.

Sterling rose 0.3 percent to $1.2787 and moving further away from a June 2017 low of $1.2659 hit earlier this week. Against the euro and the yen, the pound was flat at 89 pence and 143.63 yen respectively.

The proportion of investors looking to raise their holdings of UK assets fell to 15 percent from 21 percent in the third quarter, according to a State Street Survey, indicating investors are growing wary as Brexit talks approach a crunch point.

The pound and the British stock market top the list of bearish bets among global investors due to Brexit concerns though that could lead to a big snap back if an orderly Brexit or no-Brexit are the outcome.

Currency derivative markets painted a picture of relative calm on Thursday as investors remained broadly cautious.