January 29, 2019 / 9:45 PM / 5 months ago

FOREX-Pound falls on no-deal Brexit worries, dollar steady

    * UK parliament rejects most amendments on Brexit, revives
anxiety
    * Traders await clues from Fed on balance sheet stance
    * Criminal charges against Huawei cloud U.S-China trade
talks
    * Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

 (Updates market action after Brexit amendment votes, adds
quote)
    By Richard Leong
    NEW YORK, Jan 29 (Reuters) - Sterling fell on Tuesday as
British lawmakers rejected most amendments seeking for Britain
to avoid leaving the European Union without a deal, reviving
worries of a chaotic withdrawal from the trading bloc that would
damage the U.K. economy.
    British lawmakers failed to pass several proposals that take
a "no-deal" Brexit off the table. Instead they voted to instruct
Prime Minister Theresa May to demand from the EU to replace the
Irish border arrangement as a part of Brexit, but Brussels said
it will not change.
    "We just don't have a resolution yet," said Ben Randol,
senior FX strategist at Bank of America Merrill Lynch in New
York. "It just sets up more conflicts going forward."
    In late trading on Tuesday, the pound fell 0.71
percent to $1.3062, retreating further after hitting its highest
since mid-October last week.
    The euro jumped 0.80 percent at 87.53 pence,
reversing its earlier fall prior to the amendment votes.
    The euro zone single currency was little changed
at $1.1433 and marginally higher at 125.09 yen.
    The dollar, euro, yen and other major currencies were locked
in narrow trading ranges, with traders reluctant to take big
positions due to uncertainty over the U.K. parliamentary vote.
    Traders also await possible clues from the Federal Reserve
on whether it might pause from its current rate-hike campaign.
Fed policy-makers began a two-day policy meeting on Tuesday.
    Investors expect the Fed, the U.S. central bank, to adopt a
more cautious stance, pressured by signs of a peak in corporate
earnings and the threat of an economic slowdown at home and
globally.
    Fed policy-makers are expected to release a policy statement
on Wednesday at 2 p.m. (1900 GMT), followed by a press
conference with Fed Chairman Jerome Powell.
    Adding to investors' jitters were criminal charges against
China's Huawei Technologies Co. Ltd. for violating U.S.
sanctions against Iran. This ratcheted up tensions between
Washington and Beijing before trade talks this week.

    "We don't have a lot of clarity of these global risk
events," Randol said.
    An index that tracks the dollar against a basket of
currencies was little changed at 95.815. It touched a
two-week low during the session.
    The Chinese yuan was firm at 6.748 per dollar in
offshore markets, scaling back from Monday when it reached its
strongest since July.
========================================================
    Currency bid prices at 4:34PM (2134 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1435        $1.1433     +0.02%         -0.30%      +1.1451     +1.1411
 Dollar/Yen       JPY=        109.4200       109.3400    +0.07%         -0.76%      +109.5300   +109.1300
 Euro/Yen         EURJPY=     125.11         124.93      +0.14%         -0.88%      +125.2400   +124.6900
 Dollar/Swiss     CHF=        0.9949         0.9914      +0.35%         +1.38%      +0.9957     +0.9908
 Sterling/Dollar  GBP=        1.3061         1.3162      -0.77%         +2.38%      +1.3198     +1.3058
 Dollar/Canadian  CAD=        1.3275         1.3262      +0.10%         -2.65%      +1.3286     +1.3242
 Australian/Doll  AUD=        0.7151         0.7165      -0.20%         +1.45%      +0.7176     +0.7139
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1375         1.1333      +0.37%         +1.07%      +1.1379     +1.1333
 Euro/Sterling    EURGBP=     0.8752         0.8681      +0.82%         -2.58%      +0.8757     +0.8657
 NZ               NZD=        0.6828         0.6828      +0.00%         +1.65%      +0.6861     +0.6816
 Dollar/Dollar                                                                                  
 Dollar/Norway    NOK=        8.4998         8.5107      -0.13%         -1.61%      +8.5190     +8.4771
 Euro/Norway      EURNOK=     9.7183         9.7275      -0.09%         -1.89%      +9.7358     +9.6930
 Dollar/Sweden    SEK=        9.0676         9.0515      +0.20%         +1.16%      +9.0802     +9.0365
 Euro/Sweden      EURSEK=     10.3685        10.3478     +0.20%         +1.02%      +10.3705    +10.3440
 
    
 (Additional reporting by Saikat Chatterjee in LONDON
Editing by David Gregorio and James Dalgleish)
  
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