LONDON, Dec 31 (Reuters) - Sterling extended gains on Thursday, rising as much as 0.6% versus the euro after news that trading platforms in the European Union can be used by UK market participants for up to three more months to avoid disruption to swaps trading.
By 1045 GMT, the pound was trading at 89.79 pence, having hit a session high of 89.76 pence. It touched a new 2-1/2 year high to the dollar at $1.3686, a 0.4% gain on the day .
While the Brexit trade deal agreed on Christmas Eve set rules for industries such as fishing and agriculture, it did not cover Britain’s finance sector, leading to fears that swaps trading worth $200 billion could be disrupted next week.
But Britain’s markets watchdog said on Thursday UK market participants could use EU platforms to trade swaps for up to three months to avoid potential disruption in markets .
Reporting by Sujata Rao Editing by Tommy Wilkes