The pound surged to a five-week high on Thursday after lawmakers voted to prevent Prime Minister Boris Johnson taking Britain out of the European Union on Oct. 31 without a transition agreement and his brother Jo quit the government, citing national interest.
Political uncertainty remained high as the prime minister renewed his effort to seek an election on Oct. 15 after a first attempt was defeated on Wednesday. But sterling responded to a sense that a no-deal Brexit had been averted for now.
The British currency rose as much 0.8% to above $1.2350, its highest since July 29 and building on Wednesday's 1.4% surge, its biggest one-day jump since March.
Though it trimmed some gains to stand 0.6% up on the day at $1.2325 in late London trading, the pound is firmly on track for its biggest two-day rise in 10 months as some hedge funds are forced to unwind some of their extreme bearish bets.
The pound has been shunned in recent weeks as concerns grew that Britain would crash out of the EU without a deal on the scheduled date of Oct. 31. On Monday, it fell to below $1.20, a near-three-year low.
Source : Reuters