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Sterling Under Pressure as Brexit Vote Looms

Investing.com - The pound was slightly higher but remained under pressure on Wednesday as the chances of British Prime Minister Theresa May’s Brexit deal being passed were slim.

GBP/USD rose 0.3% to 1.2750 as of 4:58 AM ET (9:58 GMT), up from an overnight low of 1.2712.

The future of Britain remains uncertain, as the government is unlikely to get another deal if the draft bill fails, increasing the chances of a hard Brexit come March 29.

"I don't think the British public are served by fantasies about magical, alternative deals that are somehow going to spring out of cupboard in Brussels," Cabinet Office Minister David Lidington said in an interview with BBC radio.

"This deal on the table has involved some very difficult give and take on both sides."

The parliamentary vote is expected on Jan. 15.

Meanwhile the euro was pushed higher by a weaker dollar as investors turned away from risk averse assets after the U.S. and China concluded trade talks. The meetings were extended for a third day and China is expected to release a statement on the results.

"A good result will not only benefit both China and the United States. I believe that it is also good news for the world economy," Chinese foreign ministry spokesman Lu Kang said.

EUR/USD inched up 0.16% to 1.1457 while the U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, fell 0.11% to 95.37.

Elsewhere, AUD/USD rose 0.2% to 0.7153 while NZD/USD increased 0.5% to 0.6751 and USD/CAD was down 0.2% to 1.3235.

-Reuters contributed to this report.

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