By Yasin Ebrahim
Investing.com – The pound gave up some gains Monday as a report about a lack of progress on post-Brexit talks cooled renewed investor optimism that a deal can still be reached with just 17 days to go until the end of the Brexit transition period.
GBP/USD rose 0.78% to $1.3325 after hitting a high of $1.3445.
The latest update on Brexit negotiations suggests that the early-day optimism may have been misplaced as talks remain "difficult" amid a lack of significant progress in recent days, Sky News reporter Adam Parsons (NYSE:PSN) said in tweet, citing an unnamed source.
The pound had made a strong start to the week early Monday after the UK and EU kicked the Brexit can down the road, extending the deadline once again after claiming that enough progress had been made to continue talks.
A new deadline for talks, which will continue in Brussels on Tuesday, has not been set but the clock continues to tick down on the final Dec. 31 deadline, the end of the transition period.
In the absence of a trade deal, the two sides would begin trading on World Trade Organization terms that could lead to a rise in cost for both sides to do business with each other.
Talks have been held back for months as negotiators on both sides have struggled to break the impasse amid key sticking points including fishing quotas and "level playing field" rules.
As it stands, both sides are leaning toward a no-deal scenario. Chief EU negotiator Michel Barnier on Monday suggested there was a "narrow path" to an agreement, while Boris Johnson said reiterated the "most likely" is a no-deal Brexit scenario.
The dire impact of a no-deal Brexit on the economy has been well documented, but it could also mark the end of Johnson's reign as prime minister.
The independent quoted senior Conservative lawmaker Sir Roger Gale as saying that Johnson would have "failed the people of the United Kingdom," in the event of a no-deal scenario and the prime minister's position would be untenable.