GBP declined against its major rivals in the European session on Thursday as the latest developments in the UK-EU talks on post-Brexit trade relations raised investors' fears that the sides might fail to agree on a free trade deal.

After the meeting with the UK's Prime Minister Boris Johnson last night, the European Commission's (EC) president Ursula von der Leyen stated that the EU and the UK's positions on outstanding issues still "remain far apart". She also added that the two sides agreed to try to resolve these essential issues and come to a decision by the end of the weekend. Meanwhile, the EC proposed targeted contingency measures to prepare for a possible “no-deal” scenario. The aim of the measures is to cater for the period during which there is no agreement in place, the EC said. The measures will ensure basic reciprocal air and road connectivity between the EU and the UK, as well as allowing for the possibility of reciprocal fishing access by EU and UK vessels to each other's waters.

The disappointing outcome of the meeting of Johnson and von der Leyen made a no-deal Brexit looking more likely, putting pressure on the pound. But hopes of a last-minute deal still remain.