FOREX-Pound pauses after UK parliament gives nod to Brexit delay

Reuters

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    * Pound off 9-month peak, eyes next vote and EU summit
    * Yen soft ahead of BOJ's policy meeting
    * U.S. data points to slowdown, keeps dollar in check
    * Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

    By Hideyuki Sano
    TOKYO, March 15 (Reuters) - The British pound paused for
breath on Friday after the UK parliament voted overwhelmingly to
seek a delay in Britain's exit from the European Union while the
yen looked to the Bank of Japan's guidance on its policy later
in the day.
    Sterling  GBP=D4  fetched $1.3253, having slipped further
from Wednesday's nine-month high of $1.3380, with its fall of
0.76 percent on Thursday. 
    Against the euro, the pound retreated to 85.25 pence
 EURGBP=D4  from Wednesday's 22-month peak at 84.725.
    British lawmakers approved a motion setting out the option
to ask the EU for a short delay if parliament can agree on a
Brexit deal by March 20, or a longer delay if no deal can be
agreed in time.  urn:newsml:reuters.com:*:nL8N2112BD
    The pound was mostly steady after the motion was passed late
on Thursday. 
    "There has been a soft consensus in the market that the
Brexit will be delayed. Things have been moving in line with
that," said Kyosuke Suzuki, director of forex at Societe
Generale.
    "But tail risk has not completely disappeared yet. The next
week's EU summit will probably be the climax," he said, noting
the fact that all 27 EU members must approve any extension.
    Before UK Prime Minister Theresa May meets EU leaders on
Wednesday and Thursday, a new vote on her twice-rejected deal is
likely next week.
    Lawmakers must now decide whether to back a deal they feel
does not offer a clean break from the EU, or reject it and
accept that Brexit could be watered down or even thwarted by a
long delay.
    The yen slipped to a one-week low of 111.83 per dollar
 JPY=  on Thursday partly on speculation that the BOJ could make
a stronger show of its readiness to ease policy further at its
review ending later on Friday.
    Still, most market players expect the BOJ to refrain from
any drastic changes to its policy framework. The yen last stood
at 111.77.    
    The euro eased to $1.1307  EUR=  from Wednesday's one-week
high of $1.1339, in tandem with sterling.
    The Australian dollar  AUD=D4  traded at $0.7064, off this
week's high of $0.7098 as its recent rebound was dented by
reports that a possible summit meeting the United States and
China to hammer out a trade deal will be delayed.
    U.S. Treasury Secretary Steven Mnuchin said on Thursday that
a trade summit between President Donald Trump and his Chinese
counterpart Xi Jinping would not happen at the end of March as
had been previously suggested because there was still more work
to do in trade negotiations. urn:newsml:reuters.com:*:nL1N2111M9
    Trump said whether a trade deal can be reached with China
would probably be known in the next three or four weeks.
 urn:newsml:reuters.com:*:nW1N1ZS03E
    U.S. data on Thursday underscored growing pressure on the
U.S. economy and kept the dollar in check.
    The number of Americans filing applications for unemployment
benefits increased more than expected last week while new home
sales fell more than expected in January.  urn:newsml:reuters.com:*:nL1N2101BE 

 (Editing by Shri Navaratnam)
 ((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters
Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))

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