Sterling edged off early lows but remained volatile on Monday as traders awaited a statement from Prime Minister Theresa May in parliament on her plans to break a deadlock over Brexit.
While the British currency had steadied above $1.28 levels since last week as markets ratcheted up expectations that Britain would not leave the European Union without a deal, market watchers warned of more volatility ahead.
With around two months to go until Britain is due to leave on March 29, investors advised caution around current levels as there was no sign on how it will leave the world’s biggest trading bloc, with the pound trading roughly midway of a two-year trading range.
Sterling rose about 0.3 percent from the session lows to trade virtually flat at $1.2868. Against the euro , it was down 0.1 percent to 88.33 pence.
May will make a statement in parliament at about 1530 GMT and put forward a motion in parliament on her proposed next steps on Brexit, though some lawmakers are planning to wrest control of Britain’s exit from the government.