The pound briefly dropped 1% against dollar on Wednesday after the Bank of England said it will carry out temporary purchases of bonds to stabilise the market.
The Bank also said it would postpone the planned start of its gilt sale programme.
Sterling was last down 0.54% to $1.067, having dropped to a session low of $1.0618. The euro was roughly flat against the pound after the Bank's announcement at 89.46 pence.
The pound dropped to a record low of $1.0327 on Monday. (Reporting by Harry Robertson; editing by Amanda Cooper)