* Pound drops close to 2% as virus disrupts freight
* Brexit talks deadlocked
* New coronavirus strain overshadows U.S. stimulus deal
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Julien Ponthus
LONDON, Dec 21 (Reuters) - The British pound and the euro
fell on Monday as investors sought refuge in the dollar, after a
fast-spreading new coronavirus strain shut down much of the
United Kingdom and disrupted international freight amid Brexit
talks uncertainties.
Sterling GBP=D3 fell close to 2% against the dollar in
morning trading before Prime Minister Boris Johnson chairs an
emergency response meeting to discuss international travel and
the flow of freight in and out of Britain.
Much of Europe has cut off transport with the UK sowing
chaos for families and companies just days before Britain exits
the European Union.
"The British horror stories of a shortage of goods after a
hard Brexit are taking on a whole new drive - for a completely
different reason," said Commerzbank strategist Ulrich
Leuchtmann.
Adding to the transport crisis caused by the virus were
fears the UK will crash out of the EU without a trade deal on
Jan. 1.
Britain insisted on Sunday that the EU should shift position
to open the way to a post-Brexit trade deal, but there was so
far no sign a breakthrough.
At 0756 GMT, the pound GBP=D3 was down 1.85% at $1.3277.
The euro EUR=EBS also sustained losses against the dollar,
down 0.74% at $1.2169, but rose 1.26% at 0.9170 pence against
the pound.
The pandemic stress in Europe overshadowed a weekend deal
among U.S. congressional leaders for a $900 billion coronavirus
aid package. The dollar climbed against major peers on Monday with
investors seeking its relative safety as many countries
tightened COVID-19 lockdowns.
The dollar's rebound comes after it sank to
two-and-a-half-year lows last week, driven by optimism that
vaccines would help revive global growth.
The dollar index gained 0.38% to 90.625, after touching
89.723 on Thursday for the first time since April 2018.
The riskier Antipodean currencies weakened at the start of
the holiday-shortened trading week as investors rushed for haven
assets.
The Aussie dollar AUD=D3 dropped 1.24% to 75.295 U.S.
cents.
The U.S. dollar gained 0.32% to 103.62 yen JPY= , another
safe haven.