Volatility in the pound jumped as traders looked ahead to the next hurdle on the Brexit path even if a draft deal is signed off by Prime Minister Theresa May's senior ministers.
Overnight volatility in the pound against the dollar climbed to the highest level in more than a year. One-, two- and three-month measures also rose, suggesting that uncertainty will still linger even if May's Cabinet agrees to sign off later Wednesday on the Brexit deal struck with the European Union. Sterling gained 1 percent versus the U.S. currency Tuesday as the U.K. and the EU agreed on a draft text, including the Irish border backstop clause.
Sterling fell 0.2 percent to $1.2957 as of 10:33 a.m. in London. It was little changed at 86.98 pence per euro, after touching 86.56 pence Tuesday, its strongest level since April.