Picture: REUTERS
Picture: REUTERS

The rand was slightly firmer against major global currencies on Wednesday morning, extending slight gains made against the pound after UK Prime Minister Theresa May's crushing parliamentary defeat on Tuesday.

UK MPs voted overwhelming to reject May's draft Brexit deal, although after some volatility sterling has settled at roughly where it was before the vote. The pound had, in fact, rallied, despite the margin of the defeat. Analysts attributed this to the lack of clarity on what would happen next.

At 10am the rand was flat at R17.663/£, 0.2% stronger at R15.651/€ and flat at R13.7332/$. The euro was 0.14% weaker to the dollar at $1.1397.

A no-confidence vote in Theresa May's leadership is expected to take place at 9pm South African time on Wednesday, although she is expected to retain her position. May's departure, however, would prompt a general election, which analysts say would be negative for the pound.

Should she remain at the helm, May has until Monday to come up with an alternative deal.

"We can expect volatility in the pound to continue. While this level of uncertainty looms over UK politics and Brexit, we don’t expect the pound to push much higher," London Capital Group head of research Jasper Lawler said.

Brexit is likely to take centre stage on Wednesday, although local retail sales data for November is due at 1pm. Disappointing mining data for the same month weighed on the currency on Tuesday, although losses were erased in overnight trade.

The rand is expected to trade in a range of R13.60/$ to R13.85/$, according to NKC African Economics.