Pound investors hold out hope for last-ditch post-Brexit trade deal

Investors on the pound clung to hopes for a last-ditch Brexit trade deal in the meeting between EU Commission President Ursula von der Leyen and Britain’s Prime Minister Boris Johnson. The demand for the safe-haven currency boosted the dollar as U.S. coronavirus cases rose. 

The pound held on to the $1.3353 level in early Asian trade, above Monday’s low of $1.3225.

Most majors fell a fraction against the dollar overnight due to a broad risk-averse appetite. However, dollar gains were also little as traders saw it as a downtrend.

The yen steadied at 104.10 against the dollar, while the euro firmed above $1.21. Against the euro, the pound hit a seven-week low overnight, before recovering back to 90.70 pence. 

The pound’s rebound is putting pressure on leaders to compromise for a deal before Britain’s trade privileges expire at month’s end.

Meanwhile, worries about rising U.S. coronavirus cases outweighed optimism about vaccines and an economic package.

The dollar index rose to 90.890, just above the 2 ½-year low hit on Friday. On the other hand, the Aussie and the kiwi stood near their recent highs.