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Another Day Of Sterling Volatility Ahead

Sterling fell this morning and was headed for a fourth consecutive week of losses as British Prime Minister Theresa May pressed ahead with plans for a parliamentary vote on her Brexit deal with the European Union, despite warnings it could topple her government.

Sterling’s near-term fate hangs on whether May can win a majority for her Brexit deal in a vote on Dec. 11 that will define Britain’s departure from the EU scheduled for March.

The odds look stacked against her getting the deal through a deeply divided parliament.

The Times newspaper reported on Thursday that senior ministers were urging May to delay the vote for fear of a rout, but her spokesman has said it would go ahead as planned.

A defeat on Tuesday could open up a series of different outcomes to Britain’s departure from the EU — each with its own impact on sterling — ranging from leaving without the deal to holding a second referendum on membership.

The growing chance of averting Brexit altogether — potentially via a second referendum — has led some investors to start pricing out the prospect of a damaging “no deal” departure from the EU.

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