The British pound dropped yesterday after the latest round of high-level trade talks between the UK and the EU failed to provide a breakthrough, extending a volatile run for the currency.

Euro/sterling is trading at its highest level in six weeks, just above 91 pence.

Lee Evans, Head of Foreign Exchange Trading and Strategy at Bank of Ireland Global Markets, said volatility has picked up since this day last week.

"Over the last three weeks we've seen a 3% move higher, and again for many businesses with an exposure to sterling, they'll see that in their bottom line in terms of trading with their partners in the UK," Mr Evans said.

The level of the currency still suggests an assumption that a deal will be struck.

"I think currency markets are roughly pricing just in favour of a deal," Mr Evans said.

"There is a bit of Brexit fatigue in markets with the amount of headlines over the last few weeks, and even if you think back to earlier in the week, Wednesday was seen as the deadline day, that's now moved to Sunday, and the statement that was released after the dinner the other night did only state that a decision would be made on the future of talks, not necessarily that a deal had to be concluded over the next few days."

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Nevertheless, time is running short.

If there is no progress in talks over the weekend, or no clear plans for talks to continue, then analysts believe you are likely to see the probabilities for a no-deal scenario continue, and the pound will come under further pressure.