FOREX-Pound falls against dollar, euro after Brexit delay

(New throughout, adds analyst quotes)
By Kate Duguid
NEW YORK, Oct 22 (Reuters) - The British pound fell on
Tuesday against the euro and dollar after UK lawmakers rejected
the government's proposed Brexit timetable, but its losses were
limited as chances of a no-deal exit from the European Union
were seen as miniscule.
Although the vote on Tuesday left the pound down 0.56%
against the dollar at $1.289 GBP= , its bottom was only a
two-day low. Against the euro it hit a session low and was last
0.38% weaker EURGBP= .
"Obviously this has been pound negative," said John Doyle,
vice president for dealing and trading at Tempus Inc, "but the
pound is still very elevated considering where it has been over
the last couple of weeks."
In a rare victory for Prime Minister Boris Johnson,
lawmakers voted 329 to 299 in favor of his Brexit deal at an
important second reading, which would open the agreement up to
debate and possible amendment. It was the first time parliament
has signaled support for a deal on how Britain would leave the
EU, although still at an early stage in the legislative process.
But minutes later lawmakers voted 322 to 308 against a
motion which set out a three-day schedule to rush the
legislation through the House of Commons, which the government
says is necessary to achieve Brexit on time.
Ahead of those votes, Johnson had warned parliament that if
it defeated him on the timetable and forced a delay until
January he would abandon his attempt to ratify the deal and push
for an election instead under the slogan of "Get Brexit Done".
Johnson's remarks following the vote mentioned neither.
"There has been no mention of him pulling the deal, no
mention of an election, so those seem to be empty threats at the
moment," said Doyle, adding if the Prime Minister were to pursue
an election it would likely be to advance the existing
legislation.
"The extended timeline marginally increases uncertainty,
meaning that aggressive GBP/USD up-moves are now unlikely in the
short-term. Bottom line – GBP upside is still viable, but it
will take longer to manifest," said said Peter Kinsella, head
foreign exchange strategy at UBP.
Optimism that the UK will not leave the European Union
without a deal boosted the pound about 6% since Oct. 10, and on
Monday lifted it to a 5-1/2-month high of $1.3012.
Against a basket of six rivals, the dollar .DXY was 0.19%
higher to 97.516.