FOREX-Dollar soars, sterling sinks as coronavirus lockdowns stoke safe-haven demand

    * Pound drops most in 3 months with Brexit talks deadlocked
    * New coronavirus strain overshadows U.S. stimulus deal
    * Graphic: World FX rates in 2020

    By Kevin Buckland
    TOKYO, Dec 21 (Reuters) - The dollar climbed against its
major peers on Monday with investors rushing for its relative
safety as many countries tightened COVID-19 lockdowns.
    Sterling was on track for its biggest drop in three
months against the dollar after Britain imposed tough new curbs
to stem a fast-spreading new coronavirus strain.
    The currency also came under pressure as Brexit negotiators
failed to find an agreement on the weekend, raising the risk of
Britain crashing out of the European Union at the turn of the
year with no deal.
    The negative sentiment overshadowed an agreement among U.S.
congressional leaders for a $900 billion coronavirus aid
    The pound lost 1.14% to $1.3336. The euro slid 0.6% to
    The riskier Aussie and kiwi dollars dropped 0.7% to trade at
75.672 and 70.88 U.S. cents, respectively. The Mexican peso sank
1.1% to 20.1524 per dollar.
    "The lockdown news and the stalemate on Brexit is keeping
the market nervous," said Rodrigo Catril, National Australia
Bank's senior currency strategist in Sydney. "Dollar strength is
largely being driven by the move lower in the pound."
    The dollar's rebound comes after it sank to 2-1/2-year lows
against major peers last week, driven by optimism that a
widening vaccine rollout would revive global growth.
    The dollar index rose 0.2% to 90.461, after dipping
to 89.723 on Thursday for the first time since April 2018. 
    "The dollar had been continuously sold off against a risk-on
backdrop, and part of that was expectations of U.S. fiscal
stimulus," said Ayako Sera, senior market economist at Sumitomo
Mitsui Trust Bank. 
    "Now that has been largely agreed, we're seeing a classic
case of 'buy the rumour, sell the fact', and dollar shorts are
being unwound."
    The greenback gained 0.1% to 103.410 yen, another
traditional safe haven.
    The dollar rose 0.2% to 6.5346 Chinese yuan in the offshore
market, the biggest advance in almost a month. It traded at
6.5505 yuan in the onshore market.
    Several European countries began closing their doors to
travellers from Britain on Sunday amid alarm about the new
coronavirus strain, compounding the uncertainty around trade
come Jan. 1.
    The EU's fishing rights in British waters continues to be a
particular sticking point in Brexit negotiations. British Health
Minister Matt Hancock said on Sunday that the bloc should drop
its "unreasonable demands".
    Even so, the mood could shift quickly, NAB's Catril warned,
forecasting the pound could climb to $1.50 next year if a
last-minute Brexit agreement gets done.
    "We still can't get our heads around the fact that a trade
deal will collapse because of fisheries," he said.
    "Overall I would say that risk positivity driven by vaccines
and stimulus, plus the fact that fiscal stimulus needs to be
funded by a lot of borrowing in the U.S., still paints a picture
of dollar weakness for 2021."
    Currency bid prices at 12:47PM (347 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar                  $1.2186        $1.2260     -0.60%         +8.70%      +1.2243     +1.2178
 Dollar/Yen                   103.3920       103.3200    +0.07%         -4.81%      +103.4850   +103.2950
 Euro/Yen                     126.00         126.61      -0.48%         +3.32%      +126.6300   +125.9200
 Dollar/Swiss                 0.8865         0.8832      +0.39%         -8.38%      +0.8866     +0.8843
 Sterling/Dollar              1.3350         1.3528      -1.30%         +0.67%      +1.3466     +1.3337
 Dollar/Canadian              1.2849         1.2788      +0.49%         -1.08%      +1.2853     +1.2784
 Aussie/Dollar                0.7569         0.7624      -0.69%         +7.91%      +0.7605     +0.7565
 NZ                           0.7092         0.7142      -0.71%         +5.38%      +0.7121     +0.7086
 Dollar/Dollar All spots
Tokyo spots
Europe spots 
Tokyo Forex market info from BOJ 

 (Reporting by Kevin Buckland; Editing by Stephen Coates and
Himani Sarkar)