The pound held its losses after U.K. lawmakers rejected Prime Minister Theresa May’s revised Brexit deal.

The currency swung about in an almost 100-pip range soon after the House of Commons handed May her second defeat in two months on the U.K.’s divorce from the European Union. Lawmakers, who rejected the proposal by 149 votes, will get to vote on Wednesday on whether to rule out a no-deal Brexit. That will be followed by another vote Thursday on postponing the exit beyond March 29.

“The probability of some variant of this deal going through is falling rapidly and the probability of an alternative, almost certainly softer, deal replacing it is rising,” said Adam Cole, chief currency strategist at Royal Bank of Canada. “This scenario would likely involve the U.K. remaining in the customs union, probably moderately pound-positive.”

Sterling had earlier dropped as much as 1.1 per cent, the biggest intraday decline in almost two months. It pared losses as May’s defeat was less than the 230-vote margin she suffered in January, while the fact she made Wednesday’s planned ballot a free vote meant resignations were seen as less of a risk by the market.

Sterling slipped 0.6 per cent to US$1.3071, after earlier falling as much as low as US$1.3005. It weakened 1.1 per cent to 86.46 pence per euro. Trading volumes in the currency were more than double their 2019 average on Tuesday, according to trading platform Cboe Global Markets.