"If the deal is perceived by the market as being a proper deal, the parliament will support, the cabinet will support (it). I would imagine sterling could rally quite sharply, easily to $1.35, $1.37", Spencer said in an interview with CNBC.
Talking about the possibility of parliament not supporting the deal, he said such a development would lead to "unknown territory".
The British cabinet will meet at 1400 GMT on Wednesday to consider the draft withdrawal agreement after Britain struck a draft divorce deal with the European Union.
(Reporting by Kanishka Singh in Bengaluru; Editing by Richard Balmforth)