The British pound surged today to a two and a half dollar peak before Britain's long-awaited exit from the European single market, with a trade deal in the bag on the final trading day of a coronavirus-ravaged 2020. 

Sterling jumped to $1.3686 to attain the highest level since April 2018, boosted also after Britain became the first nation to approve AstraZeneca's cheap Covid-19 vaccine. 

It also rose as much as 0.6% against 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.

Britain's departure from the European Union takes full effect at 11pm, just hours after much of the country was moved into the top tier-four coronavirus restrictions. 

The nation left the bloc on January 31 but has been in a standstill transition while it sought a free-trade agreement - which was finally clinched on Christmas Eve and approved by UK politicians yesterday. 

That dispelled long-running fears of a chaotic no-deal departure that could have sparked a double-dip downturn, after Britain tanked into a recession earlier this year on the fallout from the coronavirus pandemic. 

"A Brexit deal may have come extremely late in the day but there will be a massive sense of relief that the UK won't be battling no-deal on top of everything else in the coming months - and that relief can be seen in the pound," OANDA analyst Craig Erlam said. 

"It's ending the year on a high - it's all about the recovery now for the UK as it faces another devastating (virus) surge and most of the country moves into tier four," Mr Erlam said. 

"The UK has suffered more than most this year and the next couple of months is unlikely to be any better. It's a long road to recovery and the Brexit deal will certainly help," he added. 

Investors were also embracing this week's positive news on vaccines, which stoked hopes of a return to normality. 

"Investors are continuing to ignore short term risks and are looking ahead to more normal times ahead with vaccines," said ThinkMarkets analyst Fawad Razaqzada. 

Meanwhile, Bitcoin stood within sight of $30,000 after hit another record high overnight on wave of enthusiasm for the world's most popular cyber currency. 

Brexit and the coronavirus have nevertheless cast a long dark shadow over global economies and stock markets this year, particularly in London which is set for an annual loss of 14%. 

Paris faces a drop of about 6.8% but Frankfurt gained 3.6% in volatile record-breaking deals over the course of 2020. 

"A turbulent and strange stock market year has come to an end," said Comdirect analyst Andreas Lipkow. 

Equities were slammed in the spring during the first wave of the pandemic. 

They have since rebounded somewhat, especially after the European Central Bank committed to an emergency pandemic asset-purchase programme, increased to €1.85 trillion in December amid unprecedented global stimulus. 

The pandemic is not the only thing that has tested investors in 2020 - plummeting oil prices and the collapse of German payment provider Wirecard also hit the headlines. 

Asian markets were mixed as a painful year drew to a close. 

While the world economy has been devastated by the coronavirus and lockdowns it has caused, markets were broadly boosted by governments and central banks stumping up mind-boggling amounts of money to prevent a depression.

The election of Joe Biden as US president in November - lifting hopes for a more calm leadership - also bolstered investor sentiment.