The pound was poised to end the week on a strong note, after upbeat economic data showed Britain's construction sector expanded at the fastest pace in eight months in November.
Sterling hit 12-week and three-week highs against the euro and the dollar respectively on Thursday (1 December), after Brexit Minister David Davis said Britain would consider making payments to the European Union budget in a bid to retain access to the single market.
By early afternoon in the final session of the week, the UK currency was up 0.44% against the dollar and 0.74% against the euro, exchanging hands at $1.2646 and €1.1894 respectively.
The pound was boosted by some positive economic data, which showed Britain's construction sector faring better than expected in November, buoyed by a strong performance in residential projects, but the rate of inflation was the steepest on record in five years.
Elsewhere, the dollar edged lower against most of its peers, after a report showed the US economy added 178,000 jobs last month, slightly below the 180,000 analysts expected.
October's gains were revised down by 2,000 to 159,000, while the unemployment rate fell from 4.9% to 4.6%, its lowest level since 2007.
Following the news, the dollar fell 0.19% against the yen to ¥113.88 and declined 0.25% and 0.13% against the Canadian dollar and the Swiss franc, exchanging hands at CAD$1.3286 and CHF1.0093 respectively.
The greenback, however, was 0.12% higher against the euro, fetching 0.9391 euro cents to the dollar.
The common currency was on the back foot against its main rivals amid increasing volatility ahead of Sunday's constitutional referendum in Italy. Experts have warned that a win for the 'No' campaign could see Prime Minister Matteo Renzi stepping down, which could in turn generate more political instability in an already volatile environment.
"The outcome of the referendum could have a significant impact on short-term euro volatility," said Ipek Ozkardeskaya, analyst at London Capital Group.
"A 'no' vote could importantly squeeze Italian politics, as citizen's veto to the constitutional change would lead the country to an early election."
Bookmaker William Hill think the Italians will vote 'No' in Sunday's referendum, rejecting the Prime Minister's proposed constitutional reforms, and have installed that option as their 1/3 (75% chance) favourite, with a Yes vote offered at 9/4.
According to the firm, Italy is also joint-fourth favourite to become the next country to leave the European Union at 10/1.