Sterling edged lower on Friday as investors booked profits after a rally, though the British currency is poised for a second consecutive week of gains on growing optimism about a Brexit deal at a European Union Summit next week.
Negotiators from both sides have been locked in talks this week to overcome differences on the biggest outstanding hurdle to a deal - how to keep the UK frontier with the Irish republic free of border checks after Britain leaves the EU in March.
The British currency slipped 0.2 per cent lower but is down 0.4 per cent from the day's highs at $1.3207. Against the euro, it was broadly steady at 87.60 pence.
While long positions in sterling have increased in the last two weeks, overall bets remain near their lowest since May 2017, according to latest positioning data.
(With inputs from agencies.)