(Recasts, new throughout; adds analyst quotes; changes
dateline, previous LONDON)
By Kate Duguid
NEW YORK, Oct 23 (Reuters) - The dollar and British pound
were steady on Wednesday as European Union leaders consider
Britain's request for a Brexit delay, and are expected to grant
a three-month extension to the Oct. 31 deadline for its
departure.
European Council President Donald Tusk said on Twitter he
had recommended late on Tuesday that EU leaders back a delay.
British Prime Minister Boris Johnson was forced by parliament to
ask for three months, but there is still a chance that some EU
countries, notably France, could demand a shorter extension.
Johnson paused his bill to enact the Brexit deal he struck
last week with the European Union's 27 other member states,
after dramatic votes on Tuesday in which the British parliament
accepted the deal in principle but rejected a three-day
timetable for passing the necessary legislation.
Foreign exchange trading was generally quiet following a
sell-off Tuesday that saw the pound drop against both the dollar
and the euro. Against the dollar, the pound was last down 0.02%
to $1.287 GBP= . Against the euro, the pound was 0.8% stronger
to 86.34 pence EURGBP= .
The dollar index was up 0.08% at 97.606 .DXY .
"With Brexit on ice for now, attention has shifted to the EU
to see if indeed it grants the UK more time – likely three
months or less. While weaker, the bottom hasn't fallen out of
the pound given that a no-deal Brexit has seemingly been taken
off the table. Expecting the unexpected with respect to Brexit –
and sterling – remains a central theme," said Joe Manimbo,
senior market analyst at Western Union Business Solutions.
Johnson did not follow through on his threat to pull the
deal if parliament defeated him on the timetable, which was
understood by the market as all but eliminating the chances of
no-deal exit.
"Things could change very quickly today, depending on the EU
response," said Adam Cole, a strategist at RBC Capital Markets,
adding, however, that he did not see much downside risk now that
a no-deal Brexit appeared to be ruled out.
Safe haven currencies earlier Wednesday had been boosted by
the Brexit uncertainty. But after the EU was seen as likely to
approve an extension, gains in the Japanese yen and Swiss franc
faded. The yen JPY= was last marginally lower at 108.55 per
dollar, with the franc CHF= at 0.991 per dollar.