FOREX-Pound pauses for breath amid Brexit limbo, dollar steadies

* Pound seen rangebound until Brexit uncertainty resolved
* Dollar steady as trade optimism wavers
* Some traders looking to U.S. VP Pence's speech

By Tom Westbrook
HONG KONG, Oct 24 (Reuters) - The British pound stabilised
on Thursday as the Brexit project entered a fresh holding
pattern, while the dollar held firm as traders took a breather
from Sino-U.S. trade headlines.
Currency markets are also sticking to tight ranges ahead of
key central bank meetings this week and next with the euro zone,
Japan and United States due to review policy.
Sterling GBP=D3 held at $1.2911 after Britain's parliament
backed a withdrawal deal, but rejected the government's tight
timetable, while European Union members delayed deciding whether
to grant a three-month extension to the Oct. 31 leaving date.
The pound has soared 6% in two weeks of volatile trade since
British Prime Minister Boris Johnson flagged and then clinched a
deal with the EU on the terms of Britain's exit from the bloc.
"Sterling remains at the centre of the focus for forex
markets," said Michael McCarthy, chief market strategist at
brokerage CMC Markets in Sydney.
"It looks like traders are weighing up the current
parliamentary shenanigans versus the seeming inevitability of a
Brexit," he said.
Commonwealth Bank of Australia analysts reckon the pound
will stay rangebound between $1.3000 and $1.2800 until things
become clearer.
European Council President Donald Tusk said he recommended
the leaders of the EU's 27 other member states back a delay,
with senior EU diplomats saying a three-month delay is most
likely. Other majors were stable without much news to move the
greenback.
"With trade negotiations now moving out of the headlines,
there doesn't seem much to spur the dollar in either direction,"
CMC Market's McCarthy said.
Positive comments from U.S. and Chinese leaders earlier in
the week about progress negotiating a truce in a their trade
dispute had rallied trade-exposed currencies.
That has begun to run out of steam as concerns about the
health of the U.S. economy returned to the fore.
Tech industry bellwether Texas Instruments TXN.O posted a
disappointing earnings outlook on Tuesday, followed overnight by
signs of a slowdown in Microsoft Corp's MSFT.O cloud computing
division. Traders also await U.S. Vice President Mike Pence's speech
later in the day, after his strong criticism of China in a
speech in October last year escalated bilateral tensions and
triggered a global share selloff.
For now, the dollar was steady in Asian trade, gaining
marginally against the Australian and New Zealand dollars while
slipping marginally against the euro and Japanese yen.
Against a basket of currencies .DXY the dollar was flat at
97.459.
It stood at 108.65 yen JPY= , and drifted higher from a
five-week low touched against the kiwi on Tuesday, with the New
Zealand dollar buying $0.6420 NZD=D3 . The Australian dollar
bought $0.6851 AUD=D3 .
The Chinese yuan was flat at 7.0623 in offshore trade
CNH= .
The euro held at $1.1132 with traders looking to euro zone
manufacturing and services data and the outcome of a European
Central Bank meeting, both due later on Thursday.
"Small improvements across France, Germany and pan-Eurozone
and for both manufacturing, services and composite readings are
the consensus expectation," National Australia Bank's Head of FX
Strategy, Ray Attrill, said in a note.
"EUR will be sensitive to deviations one side or the other
of this."
The ECB is all but certain to leave policy unchanged on
Thursday, six weeks after its last meeting at which it launched
new asset purchases, a rate cut and a pledge to open the money
taps further if needed. Crypto-currency bitcoin BTC=BTSP plunged as far as 11%
overnight to a 5-month low of $7,258.00 after Facebook CEO Mark
Zuckerberg sounded downbeat about the prospect of Facebook's
crypto project, Libra. Also weighing on the digital currency was the announcement
from Google that it has achieved a breakthrough in research on a
quantum computer.
If fully developed, a vast computing power of quantum
computer is expected to obliterate existing cryptographic
technologies.