The British pound strengthened against the U.S. dollar and the euro on Friday after U.K. newspaper The Evening Standard reported that a delay to the March 29 Brexit was becoming increasingly likely.
While the idea of a Brexit delay was refuted by Prime Minister Theresa May’s government earlier this week, Friday’s report said that May’s cabinet ministers saw the likelihood of a delay rising. The pound
climbed to $1.2811 in response, versus $1.2749 late Thursday in New York.
Sterling also strengthened against the euro
, with one euro last buying £0.9003, down 0.2%
“Sterling’s aggressive appreciation following the report continues to highlight how the currency remains extremely sensitive and highly reactive to Brexit headlines,” wrote Lukman Otunuga, research analyst at FXTM.
The U.K. Parliament is slated to vote on May’s Brexit deal on Jan. 15, but market participants are skeptical whether she will be able to shore up enough votes. The deal had initially been headed for a December vote, but was postponed under the assumption May would otherwise be defeated.
On Thursday, Labor Party leader Jeremy Corbyn said the Brexit deadlock demanded fresh elections.
The U.S. dollar started the session on the back foot, with the ICE U.S. Dollar Index
down 0.3% at 95.256, retracing Thursday’s gains.
Dollar traders are awaiting consumer price index data for December at 8.30 a.m. Eastern, which is expected to show a slight contraction.
In other U.S. news, Chinese Vice Premier Liu He will be in Washington at the end of January to meet with trade representatives.
In other major currencies, the euro
strengthened to $1.1536, up from $1.1500, while the dollar weakened against the Japanese yen
, buying ¥108.29, down 0.1%.
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