The pound edged up on Wednesday after Prime Minister Theresa May vowed to contest a vote of no confidence in her leadership and warned opponents within her party that they risked creating new obstacles to Britain’s withdrawal from the European Union.
The British currency soared as much as half a percent to $1.2551 from below $1.25 in early trading. Versus the euro, it gained 0.3 percent to 90.255 pence.
Sterling had slumped to 20-month trough overnight after lawmakers in May’s Conservative party gathered enough signatures to start a no-confidence vote in her leadership.
Investors expect more sterling's swings in regardless of the outcome of this standoff - May's enemies now have confidence that PM can be toppled.