Sterling reversed early losses on Tuesday to strengthen against the euro and dollar after the speaker of the UK parliament chose amendments to be voted on, including two that would effectively take no-deal Brexit off the table.
Prime Minister Theresa May also agreed that parliament did not want to leave the European Union without a deal.
The speaker chose several amendments that will be voted on from 1900 GMT, including one which the opposition Labour Party is likely to support, which provides for delaying Brexit if parliament cannot agree a deal by Feb. 26.
Sterling raced to a session high of $1.32, up 0.2 percent on the day, after having traded in a $1.3160-$1.3170 range beforehand. Against the euro, it rose to a session high of 86.560 pence, up 0.2 percent on the day
"Given those amendments have been chosen, markets may have discerned a delay is a step closer," said Neil Mellor, FX strategist at BNY Mellon. (Reuters)