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The British currency slipped below US $ 1.30 for the first time in two weeks after MEPs defeated Theresa May's plan for Brexit for the third time.
Sterling was down 0.35% to settle for less than $ 1.30 after the House of Commons rejected the Prime Minister's proposal to pbad its plan by a two-part vote. It was down 0.33% against the euro at 1.1573 euro.
Ms. May's agreement was rejected in the House of Commons by a margin of 286 to 344 against the latest blow to her attempt to pbad a pact she spent months negotiating with Brussels through Parliament . Defeat plunges the United Kingdom into even deeper uncertainty.
"The rejection of the Brexit agreement in May by 58 votes means that there are only two weeks and eight hours left before the UK leaves the European Union." Brexit, its economy and its financial markets still have no way to go, "said Paul Dales, British chief economist at Capital Economics.
Anxiety is observed in the UK sovereign bond market, where medium-term gilts skyrocketed on Friday. The two-year short-term return, which is considered monetary policy sensitive, declined to 0.639%, down 1.9 basis points from Thursday's close. In contrast, US Treasury yields of the same maturity rose 4.6 basis points the same day.
Dean Turner, UK economist at UBS Wealth Management, added: "Sterling has not responded favorably to today's result, probably interpreting an increased risk of a non-trading scenario in two weeks. That being said, our point of view remains that members will ultimately avoid this result. "
British equities widely dismissed the vote. The large-cap FTSE 100 advanced 0.6%, while the mid-cap FTSE 250 advanced 0.9%.
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