The pound retreated from nine-month highs today as investors remain dogged by Brexit uncertainty.

In another night of drama in Westminster, MPs voted against leaving the European Union without a deal, having rejected Prime Minister Theresa May's agreement with the bloc for a second time.

The move sent the pound soaring to highs not seen since June, with most observers warning that a no-deal divorce would hammer the British economy. 

However, the currency retreated from those highs in Asian trade today, with MPs due to vote on whether to extend the March 29 deadline for leaving. 

May has warned that if MPs do not adopt her pact there could be a lengthy delay to Brexit that would see Britain taking part in European Parliament elections in May. 

"The Brexit soap opera continued with parliament voting, as expected, against leaving the European Union without a deal," said Jeffrey Halley, senior market analyst at OANDA. 

"Sterling inevitably rose overnight as traders piled into the hope-vs-reality trade," he said. 

But he added that "being irrationally exuberant on the pound could be a dangerous trade at these lofty levels in the short-term. 

"No one has actually asked the Europeans what they want, and they may yet impose potentially unpalatable conditions as the price of an exit extension," he added.