2019.02.2708:41:00UTC+00Pound Higher On Brexit Delay Hopes

The pound moved up against its major opponents in the European session on Wednesday amid continued Brexit optimism, after a media report showed that the European Union will likely acknowledge a Brexit delay of up to two years, if Britain is unable to clinch a deal in the next few weeks.

Ministers engaged in Brexit preparations hope that Brussels is unlikely to permit a "short, limited extension" of Article 50 proposed by Theresa May in the Commons yesterday, the Evening Standard reported.

Ministers considered that the EU would possibly demand an extension until December 2020, thereby effectively restoring the planned transition period with continued EU membership.

"The EU does not want a short delay. It would prefer 21 months, which would mean no future relationship talks until the start of 2021," the report said, citing U.K. sources.

The currency held steady against its major counterparts in the Asian session, barring the yen.

The pound climbed to a 9-1/2-month high of 0.8543 against the euro, from a low of 0.8596 hit at 1:15 am ET. The pound is seen finding resistance around the 0.84 level.

Survey results from the European Commission showed that Eurozone economic sentiment deteriorated for a sixth consecutive month and at a faster than expected pace in February.

The economic sentiment indicator fell to 105.3 from 106.2 in January. Economists had expected a reading of 106.

The U.K. currency strengthened to 1.3337 against the greenback, a level unseen since July 2018. At yesterday's close, the pair was worth 1.3251. Next key resistance for the pound is seen around the 1.35 mark.

The pound that closed yesterday's deals at 1.3245 against the Swiss franc advanced to a 9-month high of 1.3291. The pound is poised to challenge resistance around the 1.35 level.

The pound appreciated to a 3-1/2-month high of 147.34 versus the yen, following a decline to 146.17 seen at 1:30 am ET. If the pound rises further, 149.00 is possibly seen as its next resistance level.

Looking ahead, Canada consumer price index for January, U.S. pending home sales for the same month, wholesale inventories, advance goods trade data and factory orders, all for December, are scheduled for release in the New York session.