The dollar held gains against major peers in holiday-thinned trading on Wednesday as caution about a fast-spreading coronavirus variant in the UK stoked demand for the safest assets.
The pound has fallen for three straight days as time runs out for London to reach a trade deal with Brussels before the UK completes its exit from the European Union at year-end.
The dollar index rose 0.1% to 90.561, extending its gain for the week to 0.7%. That still leaves it on track for a more than 6% decline this year.
Sterling rose 0.1% to $1.3384, seeking to end a three-day slide.
The euro held Tuesday’s 0.7% decline to trade at $1.2166.
The dollar was little changed at 103.63 yen, another traditional haven.
“People have some concerns about COVID and about Brexit, but it’s not at the point where the positive sentiment has turned,” said Shinichiro Kadota, senior currency strategist at Barclays Capital in Tokyo.
“Given how much the dollar has weakened, it’s feasible to see a retracement higher as people go for the holidays, but in the very near term we expect the dollar to remain weak.”
The market has been positioned for a pandemic recovery that lifts global growth, sapping demand for the dollar and other haven currencies.