The pound neared two and a half year high

The pound neared two and a half year high

On December 25, the British sterling hovered below a two and a half year high, after the United Kingdom and the European Union struck a narrow Brexit trade deal. Furthermore, overall sentiment in currency markets was strengthened by a postponed U.S. coronavirus economic relief package.

As we already mentioned, the pound neared two and a half year high as investors reacted to the United Kingdom and the European Union striking a long-awaited Brexit trade deal.

Although the British pound cut some gains after the news was announced, it was still up 0.5% for the session at about $1.3557. Earlier this month, the currency hit a 2020 high of $1.3624, the highest level since May 2018.

The British pound was traded at $1.3546, and it failed to increase by more than its two and a half year high of $1.3625 hit last week the U.K. achieved a Brexit trade deal with the European Union.

The euro hit 89.80 against the euro, while in the previous session it hit a three-week high of 89.54.

The sterling also reached a three and a half month high of 141.06 yen before declining to 140.22 yen, as trade was slow as many financial markets were closed for Christmas.

One in every 85 people infected in Britain

Also hindering the United Kingdom economy in the near-term, the prevalence of coronavirus infections in England increased, with one in every 85 people infected in the latest week as a new infectious strain of virus rages in the south-east of Britain.

The U.S. dollar was hemmed in a tight range as a standoff on a $2.3 trillion coronavirus in Washington resumed and raised the prospect of a partial government shutdown.

The U.S. dollar declined by 0.2% and settled at 103.55 on the day, while the euro traded flat at $1.2188.

Furthermore, the U.S. dollar index increased to its two and a half year low of 89.723, touched last week.

Meanwhile, the offshore Chinese yuan was flat at 6.5185 per dollar.