* May wins no-confidence vote by 200 to 117 votes
* Sterling still near 20-month lows
* Traders say little has changed, pound still under pressure
* Graphic: World FX rates in 2018
* Graphic: Trade-weighted sterling since Brexit vote (Recasts with results, adds new quotes, updates prices)By Tommy WilkesLONDON, Dec 12 (Reuters) - Sterling retreated from earlierhighs on Wednesday after Prime Minister Theresa May survived anattempt to oust her, but by a margin that only reinforced theextent of opposition to her deal for exiting the European Union.The pound had bounced off 20-month lows ahead of the resultof a no-confidence motion triggered by hardline eurosceptics inher Conservative party angry about her agreement with Brussels.She won, but 117 of 317 Conservative lawmakers voted againsther. With May still in power but facing an uphill battle toconvince colleagues to support her deal, sterling was back atlevels of Monday and investors said little had changed"She is so 'on the ropes' that I cannot really see herwinning the confidence vote at this juncture helping very much.In 24 hours, in all probability, this will be little more thanold news, and will do little, if anything, to change the EU'snegotiation tactics," said Richard Buxton, a fund manager atMerian Global Advisors.Investors who have shied away from betting on the pound inrecent months because of political instability and highvolatility were unlikely to be rushing back into the marketanytime soon, a senior foreign exchange trader at a Europeanbank said.
A win for May had largely been priced in, and markets arenow turning their attention to her struggle to get her dealthrough parliament.Sterling jumped to as high as $1.2672 as the resultcame in but then fell to $1.2605, up 1 percent on the day afterthe number of lawmakers that had voted against May wasannounced.The British currency also erased some of its gains versusthe euro and was up 0.7 percent at 90.055 pence by2150 GMT.The pound had tanked overnight to 20-month lows after Mayaborted a planned parliamentary vote on her plan on Monday, andthen colleagues gathered enough support to trigger theno-confidence vote. RANGE OF OUTCOMESMay still needs to seek a parliamentary mandate for herdeal, probably before Jan. 21.
She is meeting EU leaders this week to try to get herwithdrawal agreement tweaked to persuade colleagues. Theybelieve that the deal in its current form will leave Britainworse off overall.A range of outcomes remain possible, from a secondreferendum to a no-deal or a delayed Brexit.Most investors still think the British parliament willeventually back a "softer Brexit" rather than a clean break fromthe EU, although nervousness about the outcome has left thepound trading within tight ranges."I think it puts us back on track for a central scenariowhere a soft type Brexit is more likely than the UK exitingwithout a deal," said Michael O'Sullivan, chief investmentofficer, International Wealth Management at Credit Suisse.
With the results of the vote announced well after London,the world's biggest FX hub, had closed for the day, some tradershad expressed concern thin liquidity - the availability ofbuyers and sellers - would exacerbate market moves, especiallyif she had lost badly.Price swings in the pound have exceeded some high-stakesemerging markets in 2018 as the political drama has escalated. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Sterling implied volatility higher than several EM currencies Sterling valuations and positions ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Richard Leong in New York, DaniloMasoni in Milan, Saikat Chatterjee, Helen Reid and Tom Finn inLondon; editing by Larry King and John Stonestreet)
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