Markets are pricing sub-zero rates from Britain's central bank as early as May 2021.
Euro-sterling remains above the 0.90 (pence) level as the build-up of rate cut expectations (following the third lockdown) offsets the positive effect of the UK-EU trade deal
The dollar index, which measures the U.S. currency against a basket of peers, rose 0.581pc at 89.835 after rising as high as 89.979 with the euro down 0.45pc to $1.2269.
The Brexit headlines overshadowed US President Donald Trump's demand for changes to a coronavirus aid bill, effectively threatening a government shutdown next week.
The dollar surged versus most currencies, making dollar-priced soft commodities costlier for non US investors early in the day but shifted course, driving the sugar and cocoa markets.