Pound spiked 2.3% after Parliament voting

The pound surged the most since 2017 after the U.K. Parliament rejected leaving the European Union without a deal, opening up the way for Britain to delay its departure and seek an orderly divorce. Sterling was the best-performing Group-of-10 currency on Wednesday as investors bet lawmakers would rule out what is seen by businesses and economists as the worst-case scenario. The result means Parliament will vote Thursday to decide whether to postpone the U.K.’s exit from the EU in just over two weeks.

The development came after Parliament a day earlier rejected a revised version of the withdrawal agreement that Prime Minister Theresa May has spent the past two years negotiating with the EU. May is planning to ask the EU for an extension to the March 29 Brexit deadline lasting about two months, according to people familiar with the matter.

Sterling rose as much as 2.3 percent to $1.3381, for its biggest advance since April 2017. It strengthened about 1.6 percent to 84.93 pence per euro. Sterling is the strongest G-10 peer against the dollar this year, rallying from an almost 21-month low touched in January. On Wednesday, a measure of implied overnight volatility of the pound versus the greenback trailed its level ahead of Tuesday’s vote, suggesting investors were expecting the outcome.

Pound Soars as U.K. Parliament Rejects No-Deal Brexit From EU, Bloomberg, Mar 14