The sterling stayed close to 20-month lows against the US dollar on Tuesday, as the market absorbed the decision of British Prime Minister Theresa May to call off a crucial vote on her Brexit agreement.
The pound rose 0.5 percent to 1.2631 against the greenback after falling 1.3 percent on Monday, when it the currency hit 1.2507, its weakest level since April 2017.
May on Monday postponed Tuesday’s parliamentary vote on her Brexit deal to ask for further changes, a move that threatens UK’s orderly exit from the European Union (EU) as Britain now faces a departure from the bloc without an agreement, a last-minute deal, or another EU referendum.
As it stands the arrangement would be rejected by a significant margin if Members of the Parliament (MP) voted on it, said May, although she stated that she was confident of getting reassurance from the bloc on the Northern Ireland border plan.
However, European Council President Donald Tusk said the remaining 27 EU countries would not renegotiate the deal.