Sterling gave up ground on Thursday as analysts expected the Bank of England to cut interest rates by 0.25% to a new record low of 0.25% to stave off the risks brought by Britain's vote to exit the European Union.
The pound last traded at 1.3300 against the dollar, down 0.20% on the day and with a session-low at 1.3279, but the British currency held steady against the euro, hovering near the closing level at 0.8370.
Stocks on the other hand advanced handily, boosted by financial stocks, with Japan's Nikkei index surging 1.07% at the close to 16,254, recovering some of its past heavy losses, while the pan-European FTSEurofirst 300 index added 0.40%.
Oil prices returned lower after earlier data showed a big buildup in U.S. crude inventories, with U.S. crude futures down 13 cents, or 0.32% to $40.70 a barrel, while Brent crude futures lost 34 cents, or 0.80% to $42.76 a barrel.
Investors await a bunch of U.S. data later, with unemployment claims expected to have slipped to 265 thousand last week from the previous reading's 266K, which would be positive for the dollar.
Factory orders on the other hand is forecast to have tumbled 1.8% m/m in June, adding to May's 1.0% tumble, which would add to concerns over the strength of the American manufacturing sector.