Sterling rose sharply in volatile trading on Thursday, rallying from record lows hit on Monday, after the Bank of England conducted a second day of bond buying to stabilize financial markets.
The pound posted its largest one-day percentage gain since March 2020 and last traded at $1.1076, up 1.8%. After hitting an all-time trough of $1.0327 three days ago, sterling has rallied more than 7% against the dollar.
The dollar, on the other hand, fell against a basket of major currencies. It was last down 0.4% at 112.148.
The euro rose 0.7% against the dollar to $0.9804.
Data showed euro zone economic sentiment fell sharply and by more than expected in September as confidence dropped among companies and consumers, who are also downbeat about price trends in the coming months.