Investing.com - The pound struggled for direction Wednesday after UK Prime Minister Theresa May's Conservative government survived a vote of no-confidence by a slender margin.
GBP/USD rose 0.05% to $1.2865 following the outcome of the vote. In the immediate aftermath of the vote, cable rose as high as $1.2896.
The government won by 325 to 306 votes. The motion was brought against May by the leader of the opposition, Labour's Jeremy Corbyn, following the hefty defeat of the prime minister's withdrawal deal in the U.K. parliament on Tuesday.
The withdrawal deal, which sets out the terms of the U.K.’s exit from the European Union, received 202 votes for and 432 against.
May has until next week to table an alternative Brexit deal.
The pound has edged higher in recent weeks as traders rein in bets on a no-deal Brexit, while hopes continue to grow that an extension to the Article 50 deadline beyond March 29 could be possible.
But analysts have warned that fresh elections could be called if the current Brexit impasse is not resolved by February.
"We expect greater clarity shortly, likely through a run-off between the government's deal and other options," Morgan Stanley said. "We see a risk of early elections if parliament fails to reach a decision by early February."