By Anneken Tappe, MarketWatch

While the U.S. dollar remained muted and the haven Japanese yen gained on the back of global growth and trade worries, the British pound climbed to lead currency gainers on Tuesday on growing expectations the U.K.'s departure from the European Union could be delayed amid continued parliamentary wrangling over Brexit terms.

The pound bounced to $1.2967, up from $1.2891 late Monday in New York, making it the best performer among major currency pairs for the session. Earlier, economic data showed the U.K.'s unemployment rate dropped to 4%, beating expectations.

"A looming bipartisan amendment from the Conservative Party's [Nick] Boles and Labor's [Yvette] Cooper to aim at forcing to extend Article 50 in the event that no deal is reached by Feb. 26 is likely to be approved. More delay would increase chances of parliament to push for a second referendum," which would be sterling-positive, said Ashraf Laidi of Intermarket Strategy. Under Article 50, the U.K. is currently due to leave the EU on March 29.

Jeremy Corbyn, the leader of the opposition Labor Party, has backed a plan to give Parliament the vote on whether the U.K. should hold a second referendum (http://www.marketwatch.com/story/brexit-brief-labour-leader-backs-possible-referendum-rerun-2019-01-22). Prime Minister Theresa May has spoken out against that idea.

On Monday, May presented her alternative Brexit deal -- after her initial proposal was rejected overwhelmingly last week -- which seemed to include concessions to the pro-European Union side of Parliament. For example, the so-called Plan B scrapped a registration fee for EU residents in the U.K. Parliament is set to vote on the deal next week Tuesday, on Jan. 29.

Elsewhere, stocks and other assets perceived as risky took a hit after data showed the world's No. 2 economy grew at its slowest pace in decades last year (http://www.marketwatch.com/story/china-posts-slowest-economic-growth-since-1990-2019-01-20) at 6.6%. According to a report from Chinese state news agency Xinhua, President Xi Jinping has warned officials to be wary of a slowing economy (http://www.marketwatch.com/story/chinas-xi-jinping-warns-over-economy-in-high-level-meeting-report-2019-01-22) and to take action.

Don't miss:Here's what really worries investors about China's slowdown (http://www.marketwatch.com/story/heres-what-really-worries-investors-about-chinas-slowdown-2019-01-22)

In response to the data, President Donald Trump tweeted (https://twitter.com/realDonaldTrump/status/1087469381586771973) that China's economic slowdown was due to trade tensions with the U.S. and that Beijing should "finally do a Real Deal, and stop playing around."

Meanwhile, news reports (https://redirect.dataminr.com/1/redirect?key=90822319&hash=RoUxcrVWddwepkpW2-YK4mVjni7z-CTsCjZbcvvXq6o=&guid=db2d8ca6838b4762b7818a292a99aa6f) Tuesday afternoon said that the U.S. had turned down an offer of a preparatory trade meeting and asked China to sweeten its offer regarding intellectual property.

Traders are also paying attention to the annual meeting of the World Economic Forum taking place in Davos, Switzerland, this week.

While major currencies were rangebound, havens like the Japanese yen was stronger against the U.S. dollar. The greenback last bought Yen10923, down from Yen109.66 late Monday in New York. The dollar hit its lowest level against the yen around the release of the CNBC report.

The Bank of Japan is due for its first monetary policy meeting of the year at 10 p.m. Eastern.

The ICE U.S. Dollar Index was modestly lower, down 0.1% at 96.257. Last week, the popular dollar gauge posted its first weekly gain since mid-December (http://www.marketwatch.com/story/positive-trade-sentiment-lifts-dollar-against-japanese-yen-2019-01-18).

The euro , meanwhile, was little changed at $1.1366. Traders of the shared currency are looking ahead to the first meeting of the year for the European Central Bank on Thursday.

(END) Dow Jones Newswires

January 22, 2019 14:27 ET (19:27 GMT)