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Pound weakens as 'no-deal' Brexit concerns grow

Mon, 16th Sep 2019 10:12

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv

LONDON, Sept 16 (Reuters) - The pound fell nearly half apercent on Monday as concern revived that Britain will struggleto secure a deal on the terms of its departure from the EuropeanUnion.

The pound fell to a three-year low below $1.20 earlier thismonth, then soared more than 4%. Most of the gains came lastweek, after parliament voted to force Prime Minister BorisJohnson to seek an extension to the current Oct. 31 deadline forleaving the EU if no agreement has been reached.

But no solution is in sight and weekend rhetoric from bothBritain and the EU suggests their positions remain far apart.Market focus is shifting to a meeting between Johnson andEuropean Commission chief Jean-Claude Juncker on Monday.

"The fact remains there is still a decent chance of Britainnot able to secure a deal and that is prompting investors totake profits after last week's rally," said Thu Lan Nguyen, acurrency strategist at Commerzbank based in Frankfurt.

On Monday, the pound fell 0.4% to 1.2448 afterbriefly popping above $1.25 in early Asian trading, its highestin nearly two months. It weakened by a similar amount againstthe euro to 88.55 pence.

Futures data shows investors have resumed shorting the poundafter a brief pause.

Johnson and his ministers been talking up progress innegotiations with Brussels, but the EU side has sounded lessoptimistic, putting the onus on Britain to come up with newideas.

(Reporting by Saikat Chatterjee)

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