* Euro hits three-month high vs pound as May pulls Brexit vote
* Political unrest in France keeps euro on backfoot
* Dollar index bounces from biggest weekly drop in three months
* GRAPHIC-World FX rates in 2018:
(Updates market action, adds quote, graphic)
By Richard Leong
NEW YORK, Dec 10 (Reuters) - The pound slumped to its weakest
level in 20 months against the dollar on Monday as British Prime
Minister Theresa May postponed a parliamentary vote on her Brexit
deal, rekindling doubts about the United Kingdom's departure from the
European Union in March.
Safe-haven bids stoked a comeback for the greenback which suffered
its steepest weekly drop versus a basket of currencies in three months
last week. The dollar's snapback was limited as traders reduced their
expectations that the Federal Reserve might pause its interest rate
hikes sooner than previously thought.
"Pound slowly fell in the past two years, fluctuating based
on erroneous hopes of resolution, but it's clear that leaving the
single market and its benefits, in any way, is not a prosperous
route," said Juan Perez, senior currency trader at Tempus Inc in Washington.
The U.K. parliamentary vote for May's Brexit proposal was set for
Tuesday. The postponed vote left the door open to a disorderly Brexit
with no deal, a last-minute deal or another EU referendum.
European Council President Donald Tusk said the Brexit Brussels
and May agreed on are not up for renegotiation.
The sterling was down 1.41 percent at $1.2546 after touching
$1.2507, which was the lowest since April 2017.
The euro hit a three-month peak versus the pound at 90.875 pence.
It was last up 1.06 percent at 90.475 pence.
The single currency's gains were limited by the violent protests
in France against President Emmanuel Macron's economic reform.
The euro was down 0.23 percent at $1.13535 after hitting a near
2-1/2-week high at $1.14425 in Asian trading.
The greenback strengthened versus a basket of currencies that
includes the euro as traders trimmed their earlier bets on a less
aggressive Federal Reserve.
Widening interest rate differentials between the United States and
the rest of the world, driven by a confident U.S. Federal Reserve, has
fuelled an unlikely dollar rally this year. However, weak data in
recent weeks has clouded the currency's prospects for next year.
"You are getting a bit of reprieve from a very dovish view
for the Fed in the next 12 months," said Chuck Tomes, associate
portfolio manager at Manulife Asset Management in Boston.
The futures market implied traders expected the U.S. central bank
to raise key lending rates by a quarter point at its Dec. 18-19
meeting to 2.25-2.50 percent, marking its fourth rate hike in 2018.
They now saw no more than one rate increase in 2019, down from two a
month ago, according to CME Group's FedWatch program.
An index that tracks the dollar versus a group of six currencies
was up 0.74 percent at 97.232 after falling 0.78 percent last week. ========================================================
Currency bid prices at 1434 EST (1934 GMT):
Description RIC Last U.S. Close Pct YTD Pct High
Bid Low Bid
Previous Change Change
Euro/Dollar EUR= $1.1352 $1.1376 -0.21 -5.37
Dollar/Yen JPY= 113.2200 112.7200 +0.44 +0.49
Euro/Yen EURJPY= 128.55 128.39 +0.12 -4.90
Dollar/Swiss CHF= 0.9899 0.9903 -0.04 +1.60
Sterling/Dollar GBP= 1.2548 1.2726 -1.40 -7.13
Dollar/Canadian CAD= 1.3402 1.3319 +0.62 +6.56
Australian/Doll AUD= 0.7187 0.7199 -0.17 -7.87
Euro/Swiss EURCHF= 1.1240 1.1279 -0.35 -3.84
Euro/Sterling EURGBP= 0.9045 0.8948 +1.08 +1.84
NZ Dollar/Dolar NZD= 0.6872 0.6866 +0.09 -3.02
Dollar/Norway NOK= 8.5611 8.4966 +0.76 +4.31
Euro/Norway EURNOK= 9.7209 9.6883 +0.34 -1.29
Dollar/Sweden SEK= 9.0957 9.0404 +0.19 +10.9
Euro/Sweden EURSEK= 10.3276 10.3079 +0.19 +4.97
GRAPHIC: Euro, sterling since Brexit referendum GRAPHIC: Euro,
sterling since Brexit referendum interactive GRAPHIC-World FX
rates in 2018
(Additional reporting by Saikat Chatterjee in LONDON, Hideyuki Sano
in TOKYO Editing by Frances Kerry and Lisa Shumaker)
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