Investors have been rattled in recent weeks by data showing the highly transmissible virus surging across the world, forcing some governments to reimpose containment measures
The currency flatlined against the euro at 85.46 pence .
Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets, said sterling had reacted to "the negative references in the BoE FSR press conference".
On currency markets, the pound hit a more than three-year high as Britain's vaccine rollout continues and the country announced just one coronavirus-related death Monday, the lowest since the pandemic began.
The pound was up 0.8% on the day at $1.40970, having crossed the key $1.40 level for the first time since February during the Asian session, and risen above $1.41 during the European morning session.
The U.S. currency - which appreciated this year, helped in part by a rally in U.S. Treasury yields - has come under pressure in recent sessions as yields have retreated.
All three major U.S. stock indexes gained some ground and the S&P 500 and the Dow were last in positive territory, with economically-sensitive small caps and transports lagging.
The greenback posted its best quarter against major currencies in almost three years in January-March thanks to an improving U.S. economy and rising Treasury yields.
Expectations that Britain's economy will reopen quickly after its rapid vaccine rollout lifted sterling to $1.42 in February, at the time making it the best performing G10 currency.
Brazilian brokers said producers in the world's largest grower were again active sellers in the market after the country's currency weakened to the lowest level in 20 days.
The pound has lost over 1% against the dollar this week, as the EU, which is lagging Britain and the United States in rolling out vaccines, considers the measure.