Pound Spikes Up As Brexit Talks To Continue After Deadline

The pound strengthened against its major counterparts in the European session on Wednesday, erasing its early losses, as the UK confirmed that it would continue Brexit talks to secure a deal before the year-end deadline for the transition period.

The currency fell in early trading, but rebounded on reports the U.K. will not move off from talks immediately.

UK Prime Minister Boris Johnson is set to hold a call with European Commission President Ursula von der Leyen later in the day.

EU leaders are due to meet on Thursday and Friday at an European Council summit, where Brexit talks are on the agenda.

EU leaders told the U.K. on Tuesday to offer concessions on fisheries, dispute settlement and guarantees of fair competition in order to progress towards the agreement.

But a draft document showed that EU leaders are planning to say that "progress on the key issues of interest to the Union is still not sufficient for an agreement to be reached," according to news agency Reuters.

EU would also prepare for the possibility of a no-deal scenario.

Meanwhile, EU Brexit negotiator Michel Barnier would intensify the talks with Britain in order to ensure future deal after December 31.

The pound appreciated to 1.3043 against the dollar, from a 1-week low of 1.2863 set at 3:15 am ET. The pound is seen finding resistance around the 1.34 mark.

The GBP/JPY pair approached 137.18, after falling to near a 2-week low of 135.66 at 3:15 am ET. The pound is poised to find resistance around the 141.00 mark.

Having slipped to a 5-day low of 0.9122 at 3:15 am ET, the pound turned higher against the euro, with the pair trading at 0.9021. On the upside, 0.88 is seen as its next immediate resistance level.

The pound firmed to near a 2-week high of 1.1903 against the franc, reversing from near a 3-week low of 1.1769 recorded at 3:15 am ET. Further rally may take the pound to a resistance around the 1.22 level.