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2020.12.1009:07:00UTC+00Pound Declines As Brexit Fears Intensify

The pound fell against its key counterparts in the European session on Thursday, as meeting between Prime Minister Boris Johnson and European Commission president Ursula von der Leyen to strike a post-Brexit trade deal ended without a breakthrough and they agreed that a firm decision on the future of the talks would be made by the end of this weekend.

The European Union Chief said that they remained far apart on key issues and urged EU and UK negotiating teams to immediately reconvene to try to bridge gaps.

The PM and Von der Leyen agreed to make a decision on deal or no deal outcome by the end of the weekend.

The two sides remained far apart on key issues such as fisheries and level playing field and it is unclear whether these could be resolved.

Data from the Office for National Statistics showed that the UK economy expanded for the sixth straight month in October but the pace of growth moderated as expected.

Gross domestic product climbed 0.4 percent month-on-month, slower than the 1.1 percent growth seen in September. This was the sixth consecutive monthly growth.

The pound weakened to 2-day lows of 1.1824 against the franc and 138.73 against the yen, off its previous highs of 1.1923 and 139.79, respectively. The next possible support for the pound is seen around 1.17 against the franc and 135.00 against the yen.

The pound reversed from its early highs of 0.9005 versus the euro and 1.3412 against the greenback, falling to 2-day lows of 0.9099 and 1.3292, respectively. On the downside, 0.92 and 1.31 are possibly seen as its next support levels versus the euro and the greenback, respectively.

Looking ahead, the European Central Bank will announce interest rate decision at 7:45 am ET. The ECB is expected to hold its main refi rate at a record low zero percent and the deposit rate at -0.50 percent.

In the New York session, U.S. weekly jobless claims for the week ended December 5, consumer inflation and monthly budget statement for November are slated for release.

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