The pound dropped and the dollar rose in Asian trading in response to tighter coronavirus lockdown measures in Britain and a lack of progress on a UK-EU Brexit trade deal as well news of a long-awaited US economic relief deal.
The British currency fell 1.3 per cent to $1.3350 as strained negotiations over a trade agreement with the EU dragged on with no resolution in sight.
Sterling’s weakness came as the dollar strengthened after lawmakers in Washington finally reached agreement on a $900bn stimulus deal — the second-largest relief bill in US history after the $2.2tn Cares Act in March. The dollar index climbed 0.5 per cent.
Analysts said the focus on talks in Europe would intensify in the wake of the US pandemic relief plan, which would include $600 stimulus cheques for individuals and aid for small businesses.
“While the US fiscal aid consideration had largely played out according to the market’s expectations, a Brexit deal will be one to watch in the…