Investing.com - The pound rallied over 1% against the U.S. dollar on Wednesday, after British Prime Minister Theresa May was forced give way to MPs over how much influence Parliament has over her Brexit plan.
GBP/USD hit 1.2325 during European morning trade, the session high; the pair subsequently consolidated at 1.2284, up 1.31%.
Cable was likely to find support at 1.2086, Tuesday’s low and resistance at 1.2453, Monday’s high.
The British Prime Minister was effectively pushed into allowing Tory MPs on Tuesday to vote for a Labour motion calling for greater scrutiny of her Brexit proposals.
The motion, which demands that MPs scrutinise May’s negotiating position before she starts withdrawal talks with other EU states, is not binding on the government but underlines the weakness of the Prime Minister’s position in Parliament.
The pound had been under broad selling pressure since last week amid growing concerns over a ‘hard Brexit’ for Britain.
Citing leaked government papers, the Times reported on Tuesday that the U.K. could lose up to £66 billion a year under a "hard Brexit".
Meanwhile, market participants were waiting for the minutes of the Fed’s September policy meeting for hints on the central bank’s future policy moves.
Demand for the U.S. dollar still remained supported, as the odds for a December rate hike passed the 70% threshold on Tuesday.
Sterling was also sharply higher against the euro, with EUR/GBP tumbling 1.49% to 0.8983.