The pound gained ground against its main rivals on Thursday (9 February), as British MPs gave the green light to the process of triggering the Brexit bill, meaning the government remains on track to trigger Article 50 by next month.
Sterling rose 0.20% against the dollar, trading at $1.2562 and gained 0.32% against the euro, exchanging hands at €1.1753, as investors seemed to breathe a sigh of relief after the parliament's decision. MPs voted in favour of the third reading of the European Union (Notification of Withdrawal) bill by 494 to 122 and while the proposal will face further scrutiny in the House of Lords on 20 February, Britain has effectively taken a major step on the road towards Brexit.
Market participants will hope the decision will deliver some much-needed clarity over Britain's future, given the uncertainty surrounding the exit from the EU has largely contributed to the pound's disappointing performance since June.
Elsewhere, the euro extended its losses, declining 0.21% against the dollar to $1.0676 amid ongoing economical turmoil in Greece, where a new crisis appears to be brewing.
Earlier this week, the country's debts led to a sharp increase in borrowing costs, with the yields on two-year government bonds jumping above 10%, to their highest level since last June.
On Thursday, German's finance minister Wolfgang Schaeuble said Greece would need to leave the Eurozone to get a cut in debt, adding the real issue with Greece was not its debt but the country's competitiveness in a global marketplace.
"While one could argue that this sort of rhetoric is not particularly constructive when it comes to sorting out a solution to what has been a long running issue, it does also open a potential option for Greece if the current impasse continues," said Michael Hewson, chief market analyst at CMC Markets.
Lukman Otunuga, research analyst at FXTM, added that the situation in Greece, coupled with a number of elections in key Eurozone countries such as France and the Netherlands, could drive the euro even lower.
"This terrible cocktail of uncertainty and political risk could ensure the parity dream on the euro/dollar becomes a reality in the longer term," he said.
Across the Atlantic, the dollar was down against its Canadian and Australian counterparts, declining 0.22% against the former and 0.33% against the latter to CAD$1.3115 and AUD$1.3061 respectively.
However, the greenback was 0.45% and 0.39% higher against the yen and the Swiss franc respectively, buying ¥112.43 and CHF0.9986.
Meanwhile, the New Zealand dollar fell across the board after country's central bank unveiled plans not to raise interest rates until 2019, catching traders off guard with markets having priced in at least one hike this year.
"It seems the Reserve Bank of New Zealand is not quite as optimistic on the outlook as markets were expecting and its belief that the currency remains overvalued will only dampen its views," said Oanda's senior analyst Craig Erlam.