FXStreet reports that according to Lee Hardman, Currency Analyst at MUFG Bank, Brexit talks have yet to yield a breakthrough and a failure is set to down sterling by 5% to 10%.

“Pound weakness has been driven in part by reports that some EU countries are insisting that ‘no deal’ is better than a bad deal.” 

“A head-to-head meeting between chief Brexit negotiators Michel Barnier and David Frost today has been described as a ‘moment of truth’ by one EU official. If there is thought to have been sufficient progress, the UK team could remain in Brussels over the weekend. Observers still expect a deal early next week or in the first week of December.” 

“There is likely to be a much larger pound move to the downside if both sides fail to reach a deal (-5% to -10%), while we expect a modest move to the upside for the pound if a deal is finalized (+1% to +4%).”