European session review: GBP hit as fears of no-deal Brexit rise

GBP continued to decline against its major rivals in the European session on Friday, weighed down by growing fears that the EU and the UK might not reach a trade deal before the end of a Brexit transition period on December 31, 2020.

British and European leaders continue to express doubts, whether the two sides will be able to strike a trade deal. The UK's Prime Minister Boris Johnson stated on Thursday that there was “a strong possibility” that Britain and the EU would fail to strike a post-Brexit trade deal past the end of the year. British PM also said that "now is the time" for companies and people to prepare for a no-deal outcome. On Friday, a senior EU official told Reuters that the latest developments in the trade talks between the UK and the EU did not leave them "very optimistic" and suggested that Sunday's target date for a Brexit deal might well turn into another missed deadline. He also added that the gaps in negotiations were still "very very big". The European Commission's (EC) president Ursula von der Leyen also said that the positions of the two sides remained "far apart" on fundamental issues and reiterated that they would decide on Sunday, whether there were conditions for a deal or not. Micheál Martin tweeted that "huge challenges" remained between the UK and the EU negotiators on a trade deal. "I hope common sense will prevail," he added. 

Adding to the negative sentiment, London's mayor Sadiq Khan said that urgent action is needed to avoid a tier-3 lockdown in Great Britain's capital city.