The dollar is trading thin as Trump passes the pandemic aid package

TOKYO (Reuters) – The dollar has largely dropped President Donald Trump’s decision to drop the threat to block a thin-walled COVID-19 aid bill on Monday, with many investors on holiday.

The pound hovered below a 2-1 / 2-year high in the Asian session following last week’s agreement on a narrow Brexit trade deal that does not cover the UK financial sector.

The dollar index was slightly changed at 90,151, following a three-day slide.

The pound added 0.2% to $ 1.3565, returning to the $ 1.3625 mark it reached earlier this month, for the first time since May 2018.

Trump signed the $ 2.3 trillion pandemic aid and spending package law, avoiding the partial shutdown of the federal government that began Tuesday.

Earlier, he wrote on encrypted Twitter: “Good news about Covid Relief Bill. Information to follow! Earlier, he had called for an increase in stimulus controls for Americans with difficulty to $ 2,000 from $ 600.

The euro was slightly changed to $ 1.2216, close to the 2 1/2 year high of $ 1.2273 reached this month.

While last week’s Brexit deal came as a relief to investors, the nature of the pact leaves Britain much more detached from the EU, analysts say, suggesting that the cut that beat Britain’s 2016 assets will not go away any time soon.

Brussels has not yet made any decision on granting Britain access to the bloc’s financial market.

Mitsuo Imaizumi, chief FX strategist at Daiwa Securities in Tokyo, expects the pound and the euro to fall against the dollar, reaching $ 1.30 and $ 1.15, respectively, by the end of the summer.

“Regardless of the Brexit agreement, the cable will no longer work,” he said.

“It’s buy the rumor, sell the truth.”

The Australian dollar rose to 76,082 US cents, to a 2 1/2 year high of 76,390 this month.

The yuan rose after China’s central bank raised its official guidance level to its highest level in 30 months.

Offshore, the yuan rose 0.1% to $ 6.5200 on the dollar, while on land it changed hands to 6.5296.

The dollar weakened slightly to 103,455 yen.

Political factors in central Japan have been divided on how far they should go in examining the control of the yield curve, with some calling for a comprehensive review of the framework, a summary of views expressed in the December rate review showed on Monday.