Above: Head of the European Research Group Jacob Rees-Mogg has been a leading figure in the bid to trigger a vote of no confidence in Prime Minister Theresa May. Image (C) REUTERS/Toby Melville.

- No confidence vote could be called midweek

- Reports say 48 letters have been submitted to Chair of 1922 Committee

- We believe the Pound could actually benefit if May were to survive

Pound Sterling is under renewed pressue on headlines that a no confidence vote is to be called on Theresa May's leadership of the Conservative party.

According to a series of reports the 48 letters required to trigger a no confidence vote are in.

"Hearing that Sir Graham Brady has asked to see the PM after Prime Minister's Questions tomorrow, and multiple sources, including senior tories and a cabinet minister, telling us tonight they believe the threshold of 48 letters has been reached," says Laura Kuenssberg, Political Editor at the BBC.

Sir Graham Brady is the Chairman of the 1922 Committee, the group which represents Conservative party parliamentarians who are not in government, it is he who must consult the Prime Minister on the timing of a no confidence vote if a threshold of MPs lose confidence in her leadership.

The British Pound initially swung lower on the headlines, however early midweek we see the currency remains largely confined to Tuesday's ranges: 1 GBP buys 1.1042 EUR and 1 GBP buys 1.2508 USD.

"Sterling slipping on the 48 letter headline," says Jeremy Cook, an analyst at currency brokers World First.

"My ERG sources pretty confident now that 48 trigger been breached," says Sky News reporter Beth Rigby who initially broke the story. "Of course Sir Graham won’t announce while PM out of country - and we’ve been here before. But mood hardening."

The ERG (European Research Group) is a bloc of Brexiteer MPs from the Conservative party led by MP Jacob Rees-Mogg who have been highly critical of Prime Minister May's Brexit deal and they believe a change of leadership will ultimately lead to the type of Brexit they believe delivers fully on the referendum result.

The news of a potential leadership contest in the Conservative party creates further political uncertainty which in turn will likely keep the Pound under pressure, we have seen the currency struggle whenever such bouts of uncertainty flare up.

"Sterling has slumped lower again, retreating to fresh 20-month lows on the 1.25 level against the Dollar amid reports that Conservative MPs have sent the requisite 48 letters to trigger a vote of no confidence. Cable found support again on 1.250 and has pared losses but it’s being tested and as long as chaos reigns it seems likely it will go at some stage," says Neil Wilson, Chief Analyst at Markets.com.

A leadership challenge is triggered if 48 Conservatives write such letters to the chairman of the party's 1922 committee, Graham Brady.

The vote is open only to Conservative party parliamentarians, May could be toppled if 158 of her 315 lawmakers vote against her.

The party would then engage its membership to vote in a new leader.

However, if May survives the vote of no confidence she is immune to any further votes for a period of a year. However, a victory for May could well provide some confidence the leadership of the country will be secure for a crucial year in British politics which would support Sterling going forward.

The Pound-to-Euro exchange rate is quoted at 1.1050 having been as high as 1.1102 the day prior.

The Pound-to-Dollar exchange rate is quoted at 1.2507 having been as high as 1.2634 the day prior.

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Bank-beating GBP exchange rates. Get up to 5% more foreign exchange by using a specialist provider to get closer to the real market rate and avoid the gaping spreads charged by your bank when providing currency. Learn more herePolitical uncertainty has increased dramatically over the past 24 hours after Prime Minister Theresa May delayed the 'meaningful' parliamentary vote on the EU-UK Brexit deal and we would expect the British Pound to remain under pressure over coming days as a result.

May cancelled Tuesday's vote to allow her to gather further concession from Europe on signs the deal would simply fail. May has this afternoon met with Germany's Chancellor Angela Merkel who has since briefed a parliamentary group saying no further negotiations on Brexit will take place.

Merkel told the conservative bloc of lawmakers that efforts were being made to give Britain reassurances.

Jean-Claude Juncker, European Commission President, will meet May later in the day, and the message will likely be similar.

"I will meet Theresa May this evening in Brussels. I remain convinced that the Brexit deal we have is the best - and only - deal possible. There is no room for renegotiation, but further clarifications are possible," says Juncker.

May is looking to seek legal assurances that there will be an end-date to the backstop clause included in the Withdrawal Agreement.

"For investors, the decision to add to their shorts or take profits will depend on the signals we get from Prime Minister May's meetings," says Valentin Marinov at Crédit Agricole. "What we will be hoping for is some clarity on what assurances the EU will be willing to offer."

Foreign exchange markets are however increasing bets May's quest to Europe will ultimately come to nil: the opponents to the deal say they want the Withdrawal Agreement renegotiated to remove the Northern Ireland backstop clause, but Europe has categorically said this cannot happen.

"I have decided to call a European Council meeting on Brexit (Art. 50) on Thursday. We will not renegotiate the deal, including the backstop, but we are ready to discuss how to facilitate UK ratification. As time is running out, we will also discuss our preparedness for a no-deal scenario," says European Council President Donald Tusk.

The DUP and Conservative backbenchers opposed to the deal have maintained they will not budge in their opposition if the backstop clause is still included in the deal, therefore we see little chance of anything May brings back succeeding.

"This statement by the European Council President suggests Theresa May is utterly wasting her time in delaying the vote - in that Tory Brexiters and the DUP say there is no possibility of them backing her deal unless the backstop is renegotiated," says Robert Peston, Political Editor at ITV.