Pound volatile as MPs vote in Commons on May's Brexit deal

The Brexit-hit pound is enduring further volatility as MPs (BSE: MPSLTD.BO - news) prepare to reject Theresa May's Withdrawal Agreement with Brussels.

Sterling was trading up to 1.3% lower versus the dollar on the day as the clock ticked down to the so-called Meaningful Vote - with traders citing the likelihood of further uncertainty resulting from Tuesday's parliamentary theatre.

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The UK currency traded briefly just below $1.27 as the Prime Minister issued a final plea for the House to support her deal. It had started Tuesday's session at $1.2863.

It was not down so heavily against the euro - by 0.6% at €1.1150 - as the single European currency was under pressure itself after the president of the European Central Bank admitted heightened fears for the bloc's slowing economy.

The pound has been a barometer of the Brexit process for financial markets - falling from levels just above $1.50 in June 2016 when the UK voted to leave the EU.

It has fallen as low as $1.15 since - though that was largely the result of a trading blip - with the prospect of a softer, or no Brexit, supporting the currency's recovery in more recent times.

It hit a seven-week high against the greenback on Monday.

But sterling lost ground as Tuesday trading wore on and the scale of the looming defeat for Mrs May became clearer - with investors looking further afield.

Interactive investor analyst Rebecca O'Keefe told the AFP news agency: "Today's vote is a foregone conclusion so sterling is unlikely to move significantly.

"However, the range of possible outcomes after today's vote is what is far more interesting.

"From no Brexit, which could see sterling move to $1.40-plus, versus a hard Brexit which could see a move towards parity.

"The fireworks will happen after today - when it is clear what happens next."

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