The U.S. dollar pushed higher against a currency basket on Tuesday, helped by a rise in U.S. Treasury yields, while the British pound closed in on 27-month lows amid growing fears over the prospect of a no-deal Brexit.

The U.S. dollar index against a basket of six major currencies rose 0.2% to 97.17 by 03:25 AM ET (07:25 GMT).

The greenback gained 0.24% to 108.10 yen.

The euro slid 0.17% to 1.1187, amid growing expectations European Central Bank President Mario Draghi will signal a rate cut in September at a policy meeting later this week to combat risk from global trade tensions.

“It is going to take a bold stroke by the ECB to both satisfy markets clamoring for incremental easing and make a difference to the economy, all the while remaining inside its institutional setting and not destabilizing the financial system,” wrote Carl Weinberg, chief international economist at High Frequency Economics.

Sterling was 0.24% lower at 1.2442, within striking distance of a 27-month low of 1.2382 reached last week.

The pound was on the back foot due to the likelihood that Britain’s ruling Conservative party would elect Boris Johnson as its new leader and prime minister, replacing Theresa May. The result of the weeks-long internal party election will be announced on Tuesday.

There is growing speculation Johnson will pull Britain out of the EU on Oct. 31 without a trade deal in place.

The New Zealand dollar slipped 0.34% to 0.6734, pressured in part by news the Reserve Bank of New Zealand taking a fresh look at unconventional monetary policy strategies, with interest rates already at a record low of 1.5%.

–Investing.com