The dollar largely shrugged off President Donald Trumps decision to relent on a threat to block a COVID19 aid bill in thin trading on Monday with many investors on holiday.
The pound hovered below a 212year high in the Asian session following the agreement last week of a narrow Brexit trade deal that does not cover Britains financial sector.
The dollar index was little changed at 90.151, following a threeday slide.
Sterling added 0.2 to 1.3565, inching back toward the 1.3625 mark it hit earlier this month for the first time since May 2018.
Trump signed into law the 2.3 trillion pandemic aid and spending package, averting a partial federal government shutdown that would have started Tuesday.
Earlier he had cryptically tweeted, Good news on Covid Relief Bill. Information to follow! He had previously demanded an increase in stimulus checks for struggling Americans to 2,000 from 600.
The euro was little changed at 1.2216, near the 2 12year high of 1.2273 touched this month.
While last weeks Brexit deal came as a relief to investors, the barebones nature of the pact leaves Britain far more detached from the EU, analysts say, suggesting the discount that has dogged UK assets since 2016 will not vanish soon.
Brussels has made no decision yet on whether to grant Britain access to the blocs financial market.
Mitsuo Imaizumi, chief FX strategist at Daiwa Securities in Tokyo, expects the pound and euro to decline against the dollar, reaching 1.30 and 1.15 respectively by the…