* Shutdown averted as Trump relents on threat to block bill
* Sterling hovers near 2 1/2-year high in wake of Brexit
* Graphic: World FX rates in 2020 tmsnrt.rs/2RBWI5E
By Kevin Buckland
TOKYO, Dec 28 (Reuters) - The dollar shrugged off news of
President Trump relenting on a threat to block a COVID-19 aid
bill in thin trading on Monday with many investors on holiday.
The pound hovered below a 2 1/2-year high in the Asian
session following the agreement last week of a narrow Brexit
trade deal that does not cover Britain's financial sector.
The dollar index was little changed at 90.224,
following a three-day slide.
Sterling added 0.1% to $1.3544, treading water below
the 2 1/2-year high of $1.3625 hit earlier this month.
Trump signed into law the $2.3 trillion pandemic aid and
spending package, officials said on Sunday night, averting a
partial federal government shutdown.
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 slipped 0.1% to $1.2199, further
retreating from the 2 1/2-year high of $1.2273 touched this
While last week's Brexit deal came as a relief to investors,
the bare-bones 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 bloc's 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 end of the summer.
"Regardless of the Brexit deal, cable will be down," he
"It’s buy the rumour, sell the fact."
The dollar was little changed at 103.63 yen.
Policymakers at Japan's central were divided on how far they
should go in examining yield curve control with some calling for
a comprehensive review of the framework, a summary of opinions
voiced at the December rate review showed on Monday.
Currency bid prices at 10:24AM (124 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Euro/Dollar $1.2204 $1.2220 -0.13% +8.86% +1.2208 +1.2179
Dollar/Yen 103.5720 103.6550 -0.05% -4.62% +103.6220 +103.4800
Euro/Yen 126.40 126.23 +0.13% +3.65% +126.4600 +126.0700
Dollar/Swiss 0.8896 0.8912 +0.02% -8.06% +0.8909 +0.8896
Sterling/Dollar 1.3540 1.3570 +0.10% +2.14% +1.3572 +1.3530
Dollar/Canadian 1.2845 1.2868 -0.17% -1.10% +1.2858 +1.2838
Aussie/Dollar 0.7600 0.7588 -0.04% +8.30% +0.7613 +0.7592
NZ 0.7114 0.7099 -0.13% +5.72% +0.7118 +0.7107
Dollar/Dollar All spots
Tokyo Forex market info from BOJ
(Reporting by Kevin Buckland; Editing by Stephen Coates)