By Anneken Tappe, MarketWatch

Currency markets were shaken by more Brexit drama on Monday, after a highly anticipated vote on Prime Minister Theresa May's deal to exit from the European Union was reportedly shelved.

The British pound slid Monday morning (http://www.marketwatch.com/story/british-pound-falls-on-report-uks-may-calling-off-brexit-vote-2018-12-10) and touched a 20-month low following a Bloomberg report (https://www.bloomberg.com/news/articles/2018-12-10/may-seeks-last-minute-changes-to-deal-before-vote-brexit-update) saying U.K. PM Theresa May will scrap the Tuesday vote on a Brexit plan she agreed with the European Union in the fall. The report said May would seek to reschedule it. Sterling last bought $1.2629, down from $1.2731, its weakest since June 2017. The euro rose to its highest since early September, buying GBP0.9025, up 0.9%.

May's Brexit plan had earned criticism from her own party, as well as other members of the British Parliament, for being to accommodative of the EU's demands. Market participants had been questioning whether the PM would be able to get to votes needed to box the deal through.

May's "latest move to call off tomorrow's vote, makes logical sense, but she could see Labour and European Research Group work against her and keep the vote alive. Expectations were for PM May to lose the meaningful vote on the Withdrawal Agreement in the House of Commons," wrote Edward Moya, market analyst at Oanda. "With the clock ticking down on the Tuesday vote, PM May knew a strong defeat would probably signal the end for her.

The European Court of Justice -- the union's highest court -- ruled that London was able and allowed to unilaterally walk back on its decision to leave the EU. The court thus ruled in line with an opinion written by the Advocate General last week (http://www.marketwatch.com/story/european-court-official-says-uk-can-unilaterally-overturn-brexit-2018-12-04).

Meanwhile, U.K. economic data didn't look too rosy on Monday. Manufacturing production fell 0.9% in October, versus an expected 0.05% increase. Similarly, industrial production contracted 0.6% in October, compared with an expected 0.1% expansion.

The euro was also stronger against the U.S. dollar, buying $1.1404 versus $1.1387 late Friday in New York, even has the eurozone Sentix Economic Index dropped to -0.3 in December. Investors were also looking at how the union protests in France were developing, after Christine Lagarde, head of the International Monetary Fund, said over the weekend in a CBS interview (https://www.cbsnews.com/news/transcript-christine-lagarde-on-face-the-nation-december-9-2018/) that there was "no doubt" the protests would take an economic toll on France.

The Bank of France said Monday that the French economy will indeed grow more slowly than projected (http://www.marketwatch.com/story/rioting-in-france-cuts-growth-forecast-2018-12-10-44853723) in the fourth quarter as violent protests have cut into key industries such as retail and transportation.

Later this week, the European Central Bank is due for its final monetary policy update of the year.

Elsewhere, the ICE U.S. Dollar Index was 0.3% higher at 96.807.

(END) Dow Jones Newswires

December 10, 2018 10:15 ET (15:15 GMT)