Business: Forex reforms attract global investors

The pound languished near a 20-month low against the dollar on Tuesday after British Prime Minister Theresa May postponed a crucial vote on her Brexit deal, raising the risk of a chaotic exit from the European Union.

May on Monday postponed a parliamentary vote, which was due to take place on Tuesday, on her Brexit deal to seek more concessions. Sterling crawled up 0.1 percent to $1.2574 after slumping 1.3 percent the previous day, when the currency brushed $1.2507, its lowest since April 2017.

The pound’s slide was a boon for the dollar, which rallied back from a 2-1/2-week low against a basket of currencies initially driven by a growing view that the Federal Reserve could pause its rate hike cycle sooner than previously thought.

The dollar index was a touch lower at 97.092 after rallying 0.75 percent on Monday.

“Falling US yields will eventually nudge the dollar into a downtrend, but probably not at this moment,” said Junichi Ishikawa, senior Forex strategist at IG Securities in Tokyo.

“There just isn’t enough demand for the yen, which is less of a safe haven, and the euro, with the political concerns in Europe. And there is of course the pound which is burdened with Brexit problems.”

The 10-year Treasury note yield has dropped to a three-month low this week, with dovish comments from Fed officials and soft US data further sharpening views on an imminent pause in the tightening cycle.

The euro nudged up to $1.1365. The dollar dipped 0.25 percent to 113.02 yen after advancing 0.5 percent overnight.