Sterling rallied on Wednesday morning after U.K. lawmakers voted to seize control of the parliamentary agenda from the government, moving closer to blocking a no-deal Brexit.
At around 12:00 p.m. London time, the pound rallied nearly 1 percent to trade slightly above the $1.22 level, after having fallen as low as $1.1958 during Tuesday's session, its lowest since a flash crash in October 2016.
This could see the U.K.'s deadline for leaving the bloc extended to January 31, thwarting Johnson's "do or die" plan to leave on the current October 31 deadline with or without a deal in place. Another Conservative MP, Phillip Lee, left the party to join the pro-EU Liberal Democrats, leaving Johnson's government with no working majority in the House of Commons.
Currency strategists on Wednesday struck slightly different tones as to where these developments take the outlook for the pound.Stephen Gallo, head of European FX strategy at BMO Capital Markets, told CNBC Wednesday that the GBPUSD resurgence in light of Johnson's parliamentary defeat, and the fact that lawmakers opposing no-deal will also try to block elections, tells us that there is "volatility in the volatility.
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