The pound sterling trade continues to struggle to defend its position after being weakened by Brexit risk and the strengthening of the USD after US President Donald Trump halted negotiations on a new stimulus package.
Entering the European session, the pound rose above the 1.2900 price level before declining with trading hovering at 1.2894 against the US dollar, not far from the 3-week high of 1.3007 it reached during Tuesday's trading session.
The previous rise was driven by optimistic investors after reports that the UK and the European Union (EU) were now closer to an agreement.
However, the increase in pound sterling trading was relatively limited due to pressures from Bloomberg which said the EU had no plans to offer concessions to the UK by the deadline set by Prime Minister Boris Johnson on 15 October.
Instead, the EU is ready to extend talks until mid-November and take the risk of a Brexit no-deal from succumbing to competition issues and fisheries rights.
However, in a recent statement by UK Trade Minister Liz Truss, she expressed confidence that an agreement with the EU on the future of their trade relations could be reached.
Following this mixed message from the EU and the UK, the pound's rise may continue to be limited although there is hope that an agreement can be reached.
