THE US dollar faced its worst month for nearly two years yesterday, as Brexit optimism pushed the pound to a five-month high and the euro to a two-month high.
Sterling rose to $1.3012, its first time above $1.30 since early May. It retreated below $1.2975 after Commons speaker John Bercow refused a UK government request to hold a 'yes' or 'no' vote on its Brexit deal.
The euro reached $1.118 yesterday - its highest level since mid-August - before trimming gains after Mr Bercow's ruling.
Brexit optimism has lifted the euro by 2.23pc this month versus the dollar.
"Whereas the impact of Brexit on sterling is obvious, euro-USD's response to diminished Brexit fears has probably been larger than what we expected," said foreign exchange analyst Daniel Katzive of BNP Paribas in New York.
The dollar is down 2.1pc this month against a basket of six currencies. This would be its worst performance since January 2018.