Sterling Looses Gains As May Set To Argue For Brexit Delay.. GBPUSD Sub 1.31 GBPEUR Sub 1.16

Sterling trimmed early gains on Tuesday after a German government spokesman denied a media report that Chancellor Angela Merkel was willing to put a time limit on the Northern Ireland backstop in Britain’s EU withdrawal agreement.

GBP had briefly jumped to the day’s high after the BBC reported that a British eurosceptic lawmaker had been advised that Merkel was willing to put a five-year time limit on the backstop. It had climbed as much as nearly half a percent to $1.3122 after the report, compared with $1.3076 earlier. It had also strengthened a third of a percent against the euro to 1.1627 pence.

A German government spokesman, however, dismissed the media report as “without any foundation” and the pound gave up gains to stand just 0.2 percent higher at $1.3079 by 10:30 GMT. GBPUSD currently sitting at 1.3040 and GBPEUR trading at 1.1556 at 17:01 GMT.

Disagreement between London and the European Union over the “Irish backstop” is blocking a Brexit deal from getting through Britain’s parliament.

With barely days remaining for Britain to negotiate a second delay to its departure from the EU beyond the current date of April 12, GBP traders are braced for either a lengthy delay or the prospect of crashing out of the European Union without a deal in place.

While British lawmakers have made it clear that a hard Brexit is not acceptable, there is still no clarity on what would be the nature of the deal between London and Brussels.

.While British Prime Minister Theresa May was due to travel to Berlin and Paris on Tuesday ahead of Wednesday’s EU summit in Brussels, British lawmakers will hold a 90-minute debate on her proposal to delay Britain’s EU departure date to June 30 from April 12.

On the eve of an EU summit of national leaders due to decide on whether to grant Britain another Brexit delay, the euro zone’s chief negotiator Michel Barnier said the length of any second postponement beyond the current date would depend on the rationale presented by May.