The move has seen the pound claw back around a cent since last night after markets had time to digest Nicola Sturgeon's demands for a second Scottish independence vote.
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Sterling initially lost ground against the dollar and euro after Sturgeon stated she would request authorisation from the UK government to hold a new referendum.
However, the pound was able to quickly regain the lost ground and move into positive territory after Sturgeon said the referendum will not take place until the autumn of 2018 or the spring of 2019.
GBP/USD daily graph.
Will the pound rise against the dollar this week?
This week could be one of the most volatile weeks we have seen since the Brexit result in June. Theresa May could trigger Article 50 in the coming days and that is likely to see the pound come under an increased amount of pressure. On Wednesday the U.S. Federal Reserve will conclude their latest monetary policy meeting and markets are banking on Fed Chair Janet Yellen raising interest rates again. Investors will also be looking for clues about the pace of future increases and if the result is positive we could see the dollar strengthen across the board.
Another event which could impact the GBP/USD cross is the Dutch elections. If right-wing Geert Wilders wins the vote on Wednesday it could prompt investors to pull out of the euro and head to the safety of the U.S. dollar, which in turn could force pound/dollar even lower.
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