Sterling fell 0.43% to $1.4108 following the stronger than expected US private payrolls data, having touched a three-year high of $1.4250 earlier this week, not far off its post-Brexit peak of $1.4307 in April 2018.
The pound edged up 0.2% against the euro to 85.97 pence .
The dollar index, which measures the greenback against six rivals, hovered just below 90 after dipping to as low as 89.662 on Tuesday and approaching the lowest since Jan. 7 at 89.533.
Sterling remained lower at $1.4135 after easing off a three-year high of $1.4250 reached on Tuesday.
The British currency recovered from an overnight drop against the dollar that took it to a 10-day low, as the greenback's spike higher fizzled out by the start of European trading.
Sterling is the second best-performing G10 currency versus the dollar this year, up 3.4% year-to-date and trailing only the commodity-linked Canadian dollar.
The pound's performance this year has been second only to the commodity-driven Canadian dollar among G10 currencies, buoyed by Britain's fast rollout of vaccines that sparked hopes of its economy reopening.
Traders said a lack of fresh economic data or other strong drivers meant the pound could not for now continue its recent march back to its high for the year of $1.4240, a level last reached in February.