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FOREX-Sterling up on report UK's May to delay Brexit date, yen firms

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* Sterling hits near 4-wk high on report of Brexit deadlinedelay

* Yen rises 0.25 pct vs dollar, U.S. equity futures dip

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

TOKYO, Feb 26 (Reuters) - The pound jumped to a nearfour-week peak against the dollar on Tuesday on reports of adelayed Brexit deadline, and the safe-haven yen moved off theweakest seen this year as a drop in U.S. equity futures checkedinvestors' risk appetite.

Sterling spiked to its highest against the U.S. currencysince late January after Bloomberg News reported that BritishPrime Minister Theresa May was considering delaying the March 29deadline for U.K.'s exit from the European Union.

The pound was last up 0.4 percent on the day at $1.3143GBP=D4 , sitting just below a session high of $1.3149, itshighest since Jan. 31.

"Delaying Brexit for a few months, which the E.U. is notunited on, just kicks the can down the road," said MichaelEvery, Hong Kong-based senior Asia-Pacific strategist atRabobank, in a note.

"Indeed, one could argue that by delaying to May, forexample, the odds of 'hard Brexit' rise further as at that pointany further delay would mean the UK would have to stay inwithout any E.U. Parliamentary representation - which clearlycannot work," he said.

The Sun newspaper reported May will propose formally rulingout a "no-deal" Brexit scenario which could potentially lead tothe delaying of UK's exit from the E.U. by months.

The dollar index, which measure the greenback versus abasket of its major rivals, was 0.1 percent lower at 96.329 .DXY . Traders are eyeing a slate of data due in the second half ofthe week for fresh cues on the health of the global economy,including manufacturing activity figures from China and theUnited States and revised U.S. fourth quarter gross domesticproduct figures.

Investors are also looking to the Federal Reserve's latestview on the economy and monetary policy. Fed Chairman JeromePowell will testify before the Senate Banking Committee later onTuesday, in the first of a two-day appearance before lawmakers.

Powell and other Fed policymakers have indicated they favourpatience before raising key lending rates again due to recentsigns of slowing economic growth. The futures market impliedtraders bet the central bank would not raise interest rates atall in 2019.

The yen rose a quarter of percent to 110.80 per dollar JPY= as investors sought the perceived safety of the Japaneseunit after U.S. S&P 500 equity futures ESc1 slipped in Asiantrading.

The Japanese currency - traditionally a preferred currencyin times of market stress and volatility - had fallen as low as111.24 yen per dollar on Monday, its lowest since Dec. 27, afterU.S. President Donald Trump said he will delay raising tariffson Chinese goods on March 1.

China's yuan came off a seven-month peak scaled during theprevious session.

The offshore yuan was down 0.1 percent at 6.6912 per dollar CNH= after rising as high as 6.6737, its strongest sincemid-July last year, on Monday.

The Australian dollar, seen as a proxy for China riskbecause of Australia's dependence on Chinese demand for itsexports, was largely flat at $0.7166AUD=D4 .

The euro edged up to $1.1363EUR= after advancing 0.2percent on Monday.

(Editing by Richard Borsuk & Shri Navaratnam) ((daniel.leussink@thomsonreuters.com; Twitter: @danielleussink;+81-3-6441-1825; Reuters Messaging:daniel.leussink.thomsonreuters.com@reuters.net))


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