The British currency recovered from an overnight drop against the dollar that took it to a 10-day low, as the greenback's spike higher fizzled out by the start of European trading.
The pound's performance this year has been second only to the commodity-driven Canadian dollar among G10 currencies, buoyed by Britain's fast rollout of vaccines that sparked hopes of its economy reopening.
Traders said a lack of fresh economic data or other strong drivers meant the pound could not for now continue its recent march back to its high for the year of $1.4240, a level last reached in February.
The pound fell on Tuesday, losing 0.6% against the dollar and over 1% against the euro - its worst day against the single currency in five weeks as investors took cash off the table.
Against the euro, it traded 0.7% lower to the euro at 86.50 pence, having hit a five-week low of 86.62 pence.
The British currency is see-sawing, sometimes wildly, on comments from UK and EU officials on the likelihood of a deal as the final Brexit deadline looms.