FOREX-Spread of virus mutation keeps euro and pound under pressure

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Julien Ponthus
LONDON, Dec 22 (Reuters) - The euro and the pound were on
the defensive against the dollar on Tuesday as a new coronavirus
strain spread across Britain, closing key trade routes and
creating a supply-chain nightmare while time was running out to
strike a post Brexit trade deal.
Talks between the French and British governments to reopen
their border, where hundreds of trucks are stranded, and reports
suggesting movement in Brexit talks have however helped to take
some pressure off both currencies.
At 0802 GMT, the euro was down 0.31% at $1.2209 while the
pound was losing 0.33% at $1.3422, recovering some ground after
a fall as steeply as 2.5% during the previous trading session.
The British currency was also flat at 90.95 pence against
the euro after sustaining heavy losses amid the transport crisis
on Monday.
"New hope for a (Brexit) deal before Dec. 30 and talks
between the British Prime Minister and the French President on
the supply of goods to the island have again nurtured new hope
and made EUR-GBP briefly look below the 0.91 mark", said
Commerzbank analyst Ulrich Leuchtmann.
Another positive for the pound was data showing that the
country's economic recovery from its coronavirus crash was a bit
quicker than previously thought in the July-September period.
The dollar index, which measures the currency's strength
against a basket of currencies rose 0.16% at 90.279 after the
U.S. Congress settled on a new U.S. stimulus package.
In Asia the Australian dollar AUD= fell 0.4% at $0.7554
while the New Zealand dollar NZD= lost 0.55% to 0.7065.
The yuan CNY= , which has gained nearly 10% on the dollar
since a March low, has been steady for about a week now and was
a fraction softer at 6.5448 per dollar on Tuesday.
The dollar's gains come in a market that is heavily
positioned for a weaker greenback and pricing a pandemic
recovery that lifts commodity prices and benefits exporters and
their currencies at the expense of the greenback.
The value of overall bets against the dollar eased a
fraction last week, positioning data showed, but remains near
nine-year highs struck in September. 0#NETUSDFX=