FOREX-Pound pauses after UK vote on delay; yen ticks up on BOJ, North Korea

Reuters

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    * Pound off 9-month peak, eyes next vote and EU summit
    * Yen ticks up from 1-week lows after North Korea report
    * BOJ stands pat but Kuroda seen striking dovish tone
    * 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 but stayed on course for its biggest weekly
gain in seven weeks after the UK parliament voted to seek a
delay in Britain's exit from the European Union, following a
decision to avert a no-deal Brexit.
    The yen was off one-week lows after the Bank of Japan kept
its policy on hold and a report that North Korea is considering
suspending nuclear talks with the United States.
    Sterling  GBP=D4  last traded at $1.3252, having slipped
further from Wednesday's nine-month high of $1.3380, with its
fall of 0.76 percent on Thursday. 
    But it is up 1.8 percent so far this week, the biggest such
gain since late January, supported by relief that Britain will
avoid crashing out of the EU without a deal. 
    Against the euro, the pound retreated to 85.45 pence per
euro  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 bounced back from a one-week low of 111.83 per
dollar  JPY=  touched on Thursday after Russia's TASS news
agency reported North Korea's vice foreign minister said the
country is considering suspending nuclear talks with the United
States.  urn:newsml:reuters.com:*:nS6N1YH01F
    The yen also had a mild boost as the BOJ kept monetary
policy steady. Though it had been expected to stand pat, there
are expectations that Governor Haruhiko Kuroda could make a
stronger show of its readiness to ease policy further at his
news conference at 0630 GMT.
    "It would be wise for the BOJ to keep markets believing that
way. There is no reason to crush such expectations. Kuroda could
express his willingness to ease if needed," said Shinji
Ishimaru, senior analyst at MUFG Bank.
    "But on the other hand, it is also true that the market's
take is that there's little the BOJ can actually do to ease. So
his comments may have limited power in boosting the dollar/yen."
    The dollar was broadly weaker after 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 
    The euro traded at $1.1320  EUR= , up 0.15 percent. 
    The Australian dollar  AUD=D4  gained 0.3 percent to
$0.7083. 
    It was knocked off this week's high of $0.7098 on Thursday
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
    Win Thin, global head of currency strategy at Brown Brothers
Harriman, said he expects a compromise to be reached sometime
early in the second quarter.
    "I think there is heat on both China and the U.S. to get a
compromise, but it’s not going to be some kind of big game-
changing thing," said Thin.

 (Additional reporting by Daniel Leussink, Editing by Shri
Navaratnam & Kim Coghill)
 ((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters
Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))

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