The British pound made a comeback from its weakest point in two weeks against the dollar as investors pounce on signs of increasing pressure on the government to give parliament a greater say in the final deal to leave the European Union.
After a low of $1.2347 the pound’s gains towards 1.25 was mostly because by junior Brexit minister David Jones’ statement the parliament would be given a “meaningful” vote on the deal, dealers said.
There would be no renegotiation of the terms the government brings back to parliament, Jones repeated. But the mixed messages were read as more evidence of pressure on Prime Minister Theresa May to soften a stance that prioritizes control of immigration over membership of the bloc's lucrative single market.
"The messages this afternoon are not totally clear," said London-based Societe General Strategist Alvin Tan. "What we do know is that there has been a rebellion of some form from government MPs. So I guess when this story came out people just jumped on it.
"At least there is a sense that there is some pressure on the government. The majority of MPs are in favor of maintaining some ties to the EU... so a more meaningful role for parliament is seen as a positive thing."
The sterling’s gains came after a few not-so-desirable trading days for the currency, mostly because of a run of surveys showing that the economy and consumer demand is finally softening in the face of Brexit-related risks.
The British pound was up 0.1 percent on the day at $1.2480 and up 0.7 percent against the weaker euro at 85.65 pence.