Sterling rose on Thursday but stayed near to the one-month lows against the Dollar this week, as markets regained some stability following a highly volatile start to the week.

At the time of writing, the Pound was up 0.1% on the day at $1.27025, but was still on track for a fourth consecutive weekly decline, having dropped nearly 1% this week, marking its longest run of weekly losses in almost a year.

Whereas the Euro, which reached its highest level against the Pound since late April on Thursday, rose 0.1% at 86.15 pence.

The Bank of England's decision to cut interest rates last week weakened Sterling, Reuters reports.

However, concerns about a potential hard landing for the US economy, among other factors, have since sparked a selloff in risk assets, dragging Sterling down alongside other global markets.

On Thursday, the Dollar side of the currency pair faced greater pressure. Traders are currently anticipating a full percentage point in Federal Reserve rate cuts this year, compared to about 45 basis points for the Bank of England, which theoretically gives the Pound an edge.

Sterling is down just about 0.2% this year, making it the top performer among major currencies against the Dollar. In comparison, the Euro, as the runner-up, has fallen 1%, while the Norwegian Krone, the worst performer, has dropped 6.4%.

Yet, with the Bank of England now cutting rates and risk appetite appearing fragile, Sterling may find it difficult to gain further ground, according to Chris Beauchamp, a market strategist at IG.

“After being knocked back from its gains yesterday, the price has moved higher,” he said.

“However, while a higher low is still a possibility here, it will need more than one day of gains. Sterling has been unable to manage this over the past month, with intraday bounces failing to carry over into the new session. Until this changes, the sellers remain in control.”