2019.02.2505:36:00UTC+00Pound Higher On Rumors Of Brexit Delay By Two Months

The pound strengthened against its major counterparts in the early European session on Monday, following a media report that U.K. Prime Minister Theresa May is mulling a plan to postpone the Brexit for up to two months.

Delaying Brexit would help avoid resignations by ministers deliberated to support a backbench bid to take a "no deal" Brexit off the table this week, the Telegraph reported.

The government is considering several options, which include a proposal to delay Brexit to Brussels, if May cannot clinch a deal by March 12.

May put off a so-called "meaningful vote" on her Brexit deal until as late as March 12 - just 17 days before Britain is due to leave the EU.

In addition, there are reports that EU officials are looking at options to support an extension of upto 21 months, should a request has been received.

But a source close to the European Council President Donald Tusk said that the the issue had not been discussed by leaders.

European shares rose after U.S. President Donald Trump delayed the imposition of higher trade tariffs on Chinese shipments, citing progress on a series of divisive areas, including intellectual property protection, technology transfers, agriculture, services and currency.

The currency traded mixed against its major counterparts in the Asian session. While it rose against the greenback and the yen, it held steady against the franc and the euro.

The pound advanced to a 4-day high of 0.8668 against the euro, compared to Friday's closing value of 0.8676. The pound is likely to challenge resistance around the 0.85 level.

The U.K. currency that ended last week's trading at 144.38 against the yen firmed to a 4-day high of 144.90. Next key resistance for the pound is seen around the 146.00 mark.

Data from the Bank of Japan showed that Japan producer prices rose 1.1 percent on year in January - in line with expectations and unchanged from the previous month.

On a monthly basis, producer prices sank 0.5 percent after sliding 0.1 percent in December.

The pound spiked up to a 5-day high of 1.3099 against the dollar, up from a low of 1.3050 hit at 5:45 pm ET. The pound is poised to challenge resistance around the 1.33 level.

Following a decline to 1.3050 against the franc at 2:30 am ET, the pound reversed direction and appreciated to a 4-day high of 1.3085. The pound is seen finding resistance around the 1.33 level.

Looking ahead, U.S. wholesale inventories for December are due in the New York session.

Federal Reserve Governor Richard Clarida will participate in a moderated discussion titled "Fed Listens: A Conversation with Community Leaders in Southern Dallas" in Texas at 11:00 am ET.