Early trade in New York: Dollar ticks up, pounds falls

The US dollar rose modestly on Tuesday, lifted by a dramatic slide in the pound after British Prime Minister Boris Johnson put a no-deal exit from the European Union back on the table.

Britain on Tuesday set a hard deadline of December 2020 to reach a new trade deal with the EU, trying to pressure Brussels to move more quickly to seal an accord. Johnson will use his control of parliament to outlaw any extention of the Brexit transition period beyond 2020. It was his boldest move since winning a large majority in last Thursday's election, and it spooked financial markets.

The pound had fallen 1.23% to $1.317 in North American trade, and was down 2.55% from Friday when it hit its highest since May 2018 in the wake of Johnson's electoral victory.

"Sterling-negative Brexit uncertainty returned to the forefront," said Joe Manimbo, senior market analyst at Western Union Business Solutions.

The euro rose against the pound, last up 1.36% to trade at 0.847 pence, its strength bolstering it against the US dollar as well.

The dollar index was slightly higher, up 0.13% to 97.147, driven by the fall in the pound as well as a fall in the Australian dollar.

The Aussie fell to a weekly low on Tuesday after the central bank opened the door to another cut in interest rates as early as February. The trade-linked currency also weakened as euphoria from the US-China trade agreement faded. It was last down 0.51% at 0.685 US dollars to the Aussie.