The British pound rose today as investors prepared for parliament to vote on a series of Brexit options.
Some are hoping that the current uncertainty will end in a softer Brexit than Prime Minister Theresa May's defeated withdrawal agreement.
May's deal was voted down for a third time by MPs on Friday, sending sterling plunging to below $1.30.
But the British currency has held at or above that level since.
This suggests some investors have priced out the prospect of Britain crashing out of the European Union without a deal and instead expect a long delay to the exit or Brexit to emerge eventually where closer ties are maintained to the trading bloc.
"There is a growing expectation that a Common's majority could coalesce around a softer Brexit that includes a custom's union but she is facing more threats from cabinet members to resign if she decides to pursue a softer Brexit," MUFG analysts said.
Sterling rose 0.3% to $1.3076 while the pound was flat at 86.035 pence per euro.
The analysts at MUFG said that while a no-deal Brexit on April 12 remained a risk for the pound, an emergency EU summit on April 10 could – if British lawmakers cannot agree anything this week – see a long delay to Brexit.
Parliament will vote on different Brexit options today and then May could try one last roll of the dice by bringing her deal back to a vote in parliament as soon as tomorrow.
But May's government and her party remain in open conflict.