The pound rebounded against the US Dollar and Euro tonight as markets responded to the defeat of Theresa May's Brexit plan.
Parliament voted from 432 to 202 against the May deal, the worst parliamentary defeat for a government in recent British history.
Scores from its own legislators – both Brexiteers and proponents of EU membership – joined forces to vote the deal.
The pound, which was 1.2% lower than the result of the vote, briefly lost the losses to fall 1.5% before it rebounded sharply to end 0.4% on the day at $ 1.2823.
Against the euro, the pound strengthened a quarter of a percent to 88.81 pence.
It showed how the British currency had a number of expectations that the scale of the defeat would force lawmakers to pursue other options.
But shortly after that it only traded 0.40 percent while the markets responded to the vote of 202 before the Brexit deal of Ms. May and 432 against
The pound rebounded drastically against the euro after the vote on Theresa May's Brexit deal tonight
Labor leader Jeremy Corbyn postponed a vote of no confidence in the government of Theresa May after the defeat. It is expected that tomorrow it will cause greater volatility with the markets
The markets did not seem to panic and the pound rose in value after the results, which were announced around 7:40 PM.
XTB online trading said: "Traders apparently take the outcome in preparation for an extension of the article 50 deadline, instead of increasing the chance of a Brexit without a deal and this has caused the recovery in the pound.
& # 39; Attention now focuses on what happens next to the levels of uncertainty that are being raised again and that are moving to unprecedented levels. & # 39;
But such a heavy defeat for the government is likely to lead to much volatility in the markets, which will only be exacerbated by an upcoming vote of no confidence.
Legislators will vote tomorrow night in a vote of no confidence by opposition leader Jeremy Corbyn who can lead to national elections.
Before the vote tonight, currency traders waited for more volatility, depending on the extent of the defeat and what might happen next.
The pound sterling decreased by 0.8 percent against the US dollar at $ 1,276 prior to the vote. The last 24 hours have been shown
Fiona Cincotta from the city index believed that the pound would increase if Parliament rejected the deal by a large majority – but this does not seem to be the case.
She said: "Labor (will) look to call a vote of no confidence in Theresa May, pushing for a general election.
"Domestic political chaos, the prospect of a Labor government and continuing Brexit uncertainty would be a toxic combination for the pound, returning it to $ 1.20 and the post-Brexit referendum lows.
"An extension of Article 50 seems almost inevitable at this stage, which would provide some support for the pound, as investors take the risk of a" no-deal. "
& # 39; How the pound moves afterwards depends not only on what Plan B is, but also on the reaction of Labor. & # 39;
A trader is currently looking at monitors in a currency exchange office in Seoul, South Korea
The FTSE 100, however, ended today in a positive territory thanks to higher oil prices and relocations by China to strengthen the slower economy.
The top flight from London rose by 40 points, or 0.58%, to 6.895.02 at the end. Meanwhile Brent Crude was traded at $ 60 a barrel, an increase of 1.6 percent.
Earlier, the pound rose marginally higher this morning as the Asian markets advanced ahead of the Prime Minister's Brexit deal in the next 24 hours.
What happens to the pound after tonight's vote in Westminster?
Number crunchers at ING have outlined a series of scenarios for the pound after the vote.
In the unlikely event that Ms. May's deal expires, the pound sterling will rise to $ 1.38, according to the bank.
If a general election is called, which is also unlikely, the pound would drop to $ 1.20 and if a Norwegian type arrangement was agreed, it would amount to $ 1.35.
A second referendum would make the British currency jump to $ 1.40.
However, the last three scenarios require an extension of Article 50.
If a no-deal hard Brexit is to be made, ING would pay an estimated £ 1.12 and be equal to the euro.
Sterling rose 0.3 percent against the dollar before falling back to $ 1,289, while markets in Hong Kong and Japan were trading before the crunch vote from 7pm.
Neil Wilson, market analyst at Markets.com, said that traders, regardless of outcome, "significant volatility & # 39; should expect if the news stream dictates price promotion.
He added: "The question is whether the impending disorder is fully priced.
It seems unlikely that the market really reflects where we are about to go on Brexit, although the country's lie in the longer term is more favorable for pound bulls, ie a higher probability of a non- Brexit or a very soft Brexit.
& # 39; Expansion of article 50 seems likely if this deal fails and Jeremy Corbyn manages to force an election.
• Similarly, no-deal risks are increasing by the day on March 29 for only a few months. As previously argued, one of the extremes is still the most likely outcome. & # 39;
Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Japan, said: "Markets have priced a rejection of May's plan.
& # 39; Then there are a lot of scenarios. Yet I would think that the most probable outcome is to extend the (March 29) deadline of Brexit.
Currency traders are looking at monitors in a currency exchange office in Seoul this morning
Currency options markets barely take into account the chance of sharp movements in sterling. The implied volatility of the one-month pound was 12.5 percent.
This was above the average of the past year of 8.8 percent, and an increase of more than 20 percent plus in the days just before the EU referendum in June 2016.
Michael Hewson, chief market analyst at CMC Markets, told This Is Money: "The pound is set to a possibly choppy next few days.
It has been suggested that if the Prime Minister loses the mood badly, which seems very likely, she should resign, although it is not immediately clear who would replace her.
The prime minister yesterday had trouble explaining yesterday that if the deal is postponed later tonight, there is the real possibility that the Brexit may not take place.
The pound also appears to be trading on that basis, given yesterday's sharp movement higher on a report that the conservative Eurosceptic ERG group could vote for the deal. & # 39;