Sterling gained on Monday following the British government considering a delay to Brexit if Prime Minister Theresa May fails to secure support in parliament for her withdrawal agreement.
Britain’s Brexit crisis is going down to the wire as May struggles to get the changes she needs from the EU to get her deal passed by a divided parliament forcing a potential delay to the Brexit date.
GBP has gained 2 percent over the last seven trading sessions with investors seeing the chances of a disorderly no-deal exit decreasing. Great focus is now placed on Wednesday’s parliament votes on Brexit amendments.
Opposition Labour Party lawmaker Yvette Cooper’s amendment seeks to prevent a no-deal Brexit and may be passed as three government ministers have added their support.
“I expect GBP appreciation if May loses the ability to put pressure on MPs by threatening a no-deal scenario,” said Ulrich Leuchtmann, head of FX research at Commerzbank.
The pound on Monday rose as high as $1.3099, up 0.3 percent on the day. Against the euro sterling was also ahead, rising 0.1 percent to 1.1534.
Britain’s government is considering different options, including possibly delaying Brexit, if parliament fails to approve May’s deal by March 12. Britain is due to leave the European Union on March 29.
The EU has said it will consider an extension to the Brexit process, but only if Britain can offer evidence that such a delay would break the deadlock in parliament.
Various media contributed also to this article.