Last checked at 
* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv
(Updates prices, adds comment)
By Elizabeth Howcroft
LONDON, Oct 26 (Reuters) - Cautious currency markets kept
the pound subdued against a stronger dollar on Monday, but
sterling strengthened against the euro as the current phase of
Brexit negotiations was extended until Wednesday.
The dollar strengthened, equities fell, and markets were
broadly risk-off. Analysts cited new lockdowns in Europe and
record-high daily virus cases in the United States, as well as a
lack of progress towards U.S. fiscal stimulus.
But the pound took some support from signs of progress in
Brexit trade talks. The EU's chief negotiator, Michel Barnier,
will be in London until Wednesday to try and clinch a deal,
after which negotiations will switch to Brussels.
"Right now there’s a bit of optimism creeping in from the
weekend developments - the extension of the talks until
Wednesday," said Ned Rumpeltin, head of European currency
strategy at TD Securities.
"The fact that France might be signalling some movement on
fish is encouraging. We’ll see how that plays out," he said.
At 1051 GMT, the pound was little changed against the
dollar, at $1.3051. It was up around 0.4% against the
euro, at 90.58 pence.
Britain and the EU have just over two months left to agree
on their future trading relationship, before a Dec. 31 deadline.
There are some hopes that a Brexit deal can be reached, with
Ireland's Deputy Prime Minister and Northern Ireland minister
Brandon Lewis expressing optimism on Sunday.
Asked about reports that the UK was waiting to see the
result of the U.S. elections before making a decision about
Brexit, Prime Minister Boris Johnson said the two were "entirely
separate".
Goldman Sachs FX strategists said that Brexit developments
were looking positive.
"Despite sterling's underperformance on Friday, we continue
to see a path for a sharply higher GBP/USD cross into year-end,"
they wrote in a note.
Speculators reduced their net short position on the pound in
the week to Oct. 20, for the third week running, weekly CFTC
futures data showed.
TD Securities' Rumpeltin said that this could be due to a
combination of market participants reining in positioning before
the U.S. election and that the range of possibilities around
Brexit are narrowing.
Elsewhere, news that a vaccine being developed by British
drugmaker AstraZeneca and the University of Oxford
produced an immune response in elderly and young people failed
to bolster market sentiment.
Britain's health minister said his central expectation was
for a vaccine to be rolled out for the first half of 2021.
(Reporting by Elizabeth Howcroft; editing by Emelia
Sithole-Matarise, Larry King)
