Pound shrugs off Johnson's latest Brexit setback

Sterling fell modestly as trading resumed Monday following British Prime Minister Boris Johnson's latest failure to break the Brexit deadlock, with forex markets shrugging off a weekend of drama in the British parliament.

The currency was down 0.55 percent to US$1.2913 at around 0000GMT, holding relatively steady for a currency that has been on a rollercoaster over the past month.

"The fact Sterling has proven surprisingly resilient... buttresses well for risk sentiment," wrote Stephen Innes, Asia Pacific market strategist at AxiTrader, in a commentary.

All eyes were on the pound after the House of Commons sat on Saturday to consider Johnson's EU divorce deal in a vote that was seen as a potential turning point in the long-running Brexit saga.

Instead of delivering a verdict on the deal itself, lawmakers voted to force Johnson to ask the European Union for another Brexit delay, hoping to prevent the country crashing out of the bloc on October 31 with no agreement in place.

Johnson reluctantly agreed, although the EU is yet to respond to the request and Britain's conservative government insists it is still committed to exiting by month's end.

It meant that instead of decisive developments over the weekend, the market was still waiting to see how the situation would play out, Shinichiro Kadota, exchange strategist at Barclays Securities in Japan told AFP.

"There had been hopes late last week that this issue would finally see a settlement. But now it's been shelved," he said.

"The pound rallied to close to $1.30 from $1.22... We can say it is holding firm, which shows hopes (for avoiding no-deal Brexit) have not been dashed."