Sterling was on its back foot at the start of the week, but only slightly so, as traders tried to gauge the probabilities of a withdrawal deal being reached before 31 October.
Sterling hit a three-week high on Friday, rising above the $1. 25 mark after European Council President Donald Tusk said he had received "promising signals" that a Brexit deal was possible.
Thursday proved to be a volatile session for sterling traders, despite the generally 'risk-on' backdrop in financial markets globally following reports that Beijing was still open to a limited trade deal.
The pound was once against buffeted by the ongoing twists in the Brexit negotiations on Wednesday, bouncing back from five-week lows before retreating once again.
Sterling tumbled on Tuesday as hopes of a Brexit deal faded, hitting a one-month low against the euro amid reports that Downing Street now deems a deal "essentially impossible".
The pound drifted slightly lower at the start of the week after The Daily Telegraph reported that the Prime Minister, Boris Johnson, was ready to go to the Supreme Court in order to avoid having to ask Brussels for another extension if he had not clinched a withdrawal deal by 19 October, as the Benn Act required of him.
Sterling edged higher at the start of the week after Labour leader, Jeremy Corbyn, after meeting with opposition leaders, said that he would not pursue a no-confidence vote until a no-deal Brexit was off the table.
Sterling finished the week on a down note after one of the most hawkish rate-setters on the Monetary Policy Committee signaled that a rate cut was more likely than the opposite.
Sterling slumped on Wednesday, hitting its worst level in nearly two weeks amid speculation about a general election.
The US is temporarily exempting over 400 Chinese products from tariffs imposed last year, revealed the office of the US Trade Representative on Friday.
Sterling gave back some of the previous session's gains after Dublin poured cold water on recent speculation that an agreement on a Brexit deal between the European Union and Westminster might be withing grasp.
Sterling fell on Monday amid fresh concerns about a no-deal Brexit ahead of a meeting between Prime Minister Boris Johnson and European Commission president Jean-Claude Juncker.
Sterling jumped at the end of the week amid optimism around UK politics.
British Prime Minister Boris Johnson was set to meet his Irish counterpart in Dublin on Monday for talks on the Northern Ireland backstop after a weekend that saw Work & Pensions Secretary Amber Rudd resign in protest over his handling of Brexit.
The pound extended its string of positive sessions to three on Thursday after the House of Commons voted to force the Prime Minister, Boris Johnson, to seek a three-month extension to the 31 October Brexit deadline and refused a call to hold fresh elections.
Top trade officials from the US and China will hold face-to-face talks in coming weeks despite skepticism that any substantial progress will be made, although there appeared to be increased attention around the side-effects of the trade war on third nations.
Sterling gained ground on Thursday, ticking above the $1. 23 mark as investors welcomed Prime Minister Boris Johnson's triple defeat in Parliament, although some analysts were sceptical the rally can continue.
Hong Kong Leader Carrie Lam announced on Wednesday that she was withdrawing an extradition bill granting Beijing the power take people away into what some critics said was China's opaque legal system.