The pound climbed to its highest level against the dollar in six weeks on Wednesday (25 January), recovering the losses it recorded in the previous session, while the greenback was firmly on the back foot against its main rivals.

Sterling climbed to hit a six-week high of $1.2598 against the dollar, before retreating slightly to $1.2582, but remained 0.50% higher against the US currency. The pound was also 0.34% up against the euro, trading at €1.1706, close to a three-week high against the common currency it hit earlier in the day.

The pound fell on Tuesday, as investors feared the Supreme Court Article 50 ruling would do little to derail the Brexit process. However, Theresa May's confirmation that the government will publish a White paper outlining her Brexit plans looked to remove some of the uncertainty that has plagued the pound since last June's referendum.

"[The Prime Minister] took as much as leverage as she could on the possibility of signing exceptional deals with the US on the basis of special relations with the country," said Naeem Aslam, chief market analyst at Think Markets UK.

"Trump has said that he would put the UK in the front of the queue when it comes to making deals and Theresa May is the first foreign leader to meet him. Traders are optimistic about their meeting on Friday and if she shows that she has made progress on what she has said, it will pave the way for more favorable deals with other countries."

However, Neil Wilson, senior market analyst at ETX Capital, warned the new-found enthusiasm among investors could be premature.

"Clearly there is renewed optimism around the pound, but this seems a trifle foolhardy given we know so little at present about what the Brexit negotiations will be like," he said

"There is plenty more downside risk for sterling from this level. The bullish argument is that following Theresa May's speech last week the market has priced in Britain leaving the single market already and so everything else has to be good news."

Elsewhere, the euro edged 0.13% higher against the dollar, buying $1.0745, as the greenback quickly relinquished the previous session's gains and fell against most of the G10 currencies amid renewed concerns over Donald Trump's policies.

The newly-inaugurated US president has already withdrawn the country from the Trans-Pacific Partnership, which fuelled worries that his protectionist policies could hurt the world's largest economy.

"The market has spent a lot of time focussing on Trump's protectionist policies in early 2017, fuelling a more intensified pullback in the dollar," said Joel Kruger, FX strategist at LMAX Exchange.

"Still, it would be premature to dismiss the US Dollar at this stage given anticipated Trump tax cuts and fiscal stimulus, healthy US economic data, a Fed that continues to lean to the hawkish side and technicals classifying US dollar weakness as nothing more than corrective at this stage."

The dollar was down 0.30% and 0.35% against the yen and the Canadian dollar, trading at ¥113.45 and CAD$1.3112 respectively and was 0.14% lower against the Swiss franc to CHF0.9996.

Meanwhile, the Malaysian Ringgit plunged to lows not seen since the Asian financial crisis two decades ago, buying 0.22 dollar cents.