GBP/USD rose to a high of 1.2851 before falling back to 1.2790 now

The Evening Standard reported earlier that a Brexit delay beyond 29 March looks increasingly likely, citing Cabinet ministers on the matter. That helped to send the pound soaring with cable rising from 1.2770 to a high of 1.2851.

But gains were quickly retraced to 1.2800 before a UK government spokeswoman came out to reaffirm that Theresa May has insisted that an extension of Article 50 is all but ruled out. That sent the pound a peg or two lower towards 1.2770 before coming back up to 1.2790 now.

Regardless of what the government may say at this point, a delay of Article 50 would be the most sensible option when push comes to shove next week (after May loses the meaningful vote). It'll be foolish for May to rule that out completely.

As for what a Brexit delay means for the pound, it's sort of a double-edged sword. On the one hand, it means there's a lesser probability of a no-deal outcome taking place. However, on the other hand, that means that the economy will be faced with further Brexit uncertainty down the road and the BOE's monetary policy plans will continue to be left in limbo.