The pound sterling has rallied to its strongest level in almost two years after British prime minister Theresa May told the House of Commons that politicians would have the opportunity to vote on delaying Brexit.

Following these developments, sterling has surged since the start of the week and is currently trading at £0.8563 against the euro – its strongest level since May 2017.

The rally in sterling is reflective of the growing confidence in Westminster that the risk of a no-deal Brexit is diminishing.

Extension

In the last week, three members of the British cabinet have said the UK would seek an extension to article 50 if no deal could be reached. At the same time, the leader of the Labour Party in the UK Jeremy Corbyn, has also announced his party would back a second referendum on Brexit.

Further votes on a number of Brexit amendments will take place in the House of Commons on Wednesday, which is likely to influence currency markets.