LONDON (Reuters) - Sterling rebounded on Tuesday to hit $1.2103 after British Prime Minister Boris Johnson lost his working majority in parliament when one of his Conservative lawmakers defected to the pro-European Union Liberal Democrats.
“In the immediate near-term, it makes a no-deal Brexit slightly less likely,” said Fritz Louw, currency analyst at MUFG.
He added that the bounce was likely to be short-lived.
Sterling also rallied against the euro and was last trading at 90.70 pence EURGBP=D3, up 0.4% on the day.
Reporting by Tommy Wilkes; Editing by Dhara Ranasinghe