Despite another turbulent few days in British politics, the pound is ending the week on a firmer footing.

Sterling brushed off the latest bout of Brexit nerves and further worries about a break-up of the UK, closing near $1.24 on Friday. Its revival was aided by a dovish Federal Reserve and a hawkish Bank of England.

However, there are still plenty of currency-watchers who see further trouble ahead. Many are readying for another leg down — a drop below $1.20.

Sterling’s first big hit came in the days after the June 23 vote, when it slumped 17 per cent to below $1.30. The second tumble followed in October when Theresa May’s Conservative party conference speech spooked investors, pulling sterling into the $1.25 territory.

Pressure piled up again amid government Brexit drift in January, prompting investors to flirt with $1.20. That was until Mrs May’s Lancaster House speech, which gave the market much-needed clarity on her Brexit strategy and inspired the currency’s mini-resurrection.

Now, as the prime minister prepares to trigger Article 50, the imminent start of formal negotiations for Britain’s EU divorce has several traders wondering whether the time has come to sharpen the knives again…