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GBP/USD spot rate at time of writing: 1.3028Bank transfer rate (indicative guide): 1.2740-1.2845FX specialist providers (indicative guide): 1.2890-1.2940More information on FX specialist rates herePound Sterling was pummeled and the Euro lifted sharply in a volatile as well as noisy final session of the week, while the Dollar and U.S. stocks came under pressure with barely more than a week to go before a landmark election that's key to the outlook for all exchange rates in the weeks and months ahead.

The Pound had rallied with enthusiasm in the early hours when September's retail sales numbers emerged stronger than was expected while having climbed again with as much enthusiasm when Reuters reported that France is reducing, though not abandoning, its demands of British fisheries in the Brexit negotiations.

Trade minister Liz Truss was also quoted saying "we've made real progress" and that a deal can be done, echoing the government line as both celebrated the signing of an adapted EU trade agreement with Japan.

But it wasn't long on Friday before Sterling was overcome by intense selling pressures that prompted the Pound to fall while the Euro outperformed, taking the Pound-Euro rate down -0.75% and briefly below 1.10.

"Based on where GBP is trading, risks were skewed to the downside. Certainly, Wednesday’s confirmation to restart talks was good news but there is still a way to go yet in negotiations," says Derek Halpenny, head of research, global markets EMEA and international securities at MUFG.

Above: Pound-to-Euro rate shown at hourly intervals alongside Pound-to-Dollar rate (black line, left axis).

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This was all after Brexit talks were said to renew, with Prime Minister Boris Johnson previously purporting to have called them off, which helped to briefly make Sterling the best performing major currency of the period.

The Pound was also heartened when Michel Barnier was reported to have said on Wednesday that he "wasn’t worried about anything else but fish."

"As has been the case during the past weeks, the GBP/USD price action should be primarily determined by the swings in EUR/USD given that GBP should, in the absence of new Brexit news, remain fairly stable," says Petr Krpata, chief EMEA strategist for currencies and bonds at ING.

There was no obvious reason for the Pound's sudden change of heart on Friday, not least of all because it fell even as the Euro-Dollar rate continued a rally that made Europe's single currency the outperformer for the session.

It's unusual for GBP/USD and EUR/USD to diverge and when they do there's normally a reason.

Above: Euro-to-Dollar rate shown at hourly intervals alongside Pound-to-Dollar rate (black line, left axis).

Pre-weekend, Brexit-inspired profit-taking would be one explanation for why Sterling continued to fall on Friday, with the Pound-to-Dollar rate remainng pinned to down near 1.30 even as the S&P 500 and often strongly-correlated EUR/USD rallied in the noon session.

"We have seen some remarkable resilience in EUR/USD this week and it’s not just against the dollar, the euro has outperformed, albeit modestly on a TWI basis as well. The ECB’s EUR EER is 0.5% stronger this week and the index has remained at elevated levels since a sharp rally in July. The index gained 3.4% in July into August and since the COVID crisis the EUR EER is 7.5% stronger," MUFG's Halpenny says.

Another possible explanation would be an elaborate and sophisticated defence of the Lira by Turkish monetary authorities, who may've sought to keep it from another set of new record lows. This is because Pound-to-Euro rate losses were exacerbated by the afternoon's falls in GBP/USD and the former's 15% share of the trade-weighted Euro likely further lifted that particular barometer on Friday, potentially diminishing EUR/USD's upside.

A rising Euro-Dollar rate is a key driver of Turkish currency devaluation and inflation woes, given Europe is one of Turkey's top import partners, but upside for EUR/USD is constrained by European Central Bank upset over trade-weighted currency strength.

Above: Dollar Index shown at hourly intervals alsongside S&P 500 index futures (black line, left axis).

"Opinion polls suggest Mr Biden is ahead in the US election race and the MXN believes them, up nearly 6% against the dollar this month and much stronger against the rest of Latin America," says Kit Juckes, chief FX strategist at Societe Generale. "Taking the last two weeks together, AUD (a very dovish central bank) and NOK are the weakest G10 currencies, while the standouts at the other end are the yen and Swiss franc. Overall, havens are doing well amid US political uncertainty.GBP has done well out of increased hope of a trade deal with the EU, even if time is running out."

Most notably, the greenback and U.S. stock markets both declined for the week with only 10 days left until the November 03 presidential election in what could be the first sign of investors second guessing ongoing assumptions. U.S. assets were sold widely following what was billed in the markets as President Donald Trump's last chance to shift opinion polls in his favour ahead of the vote, with the two having participated in a second televised election debate.

"Neither candidate was widely seen as having come out on top. With less than two weeks to go until polling day and nearly 50 million Americans estimated to have already voted early, time appears to be running out for President Donald Trump to catch up with Joe Biden. That said, the further rise in the Markit composite PMI in October suggests the economic recovery still has plenty of momentum," says Franziska Palmas at Capital Economics. "While the raft of euro-zone Q3 GDP data due next week are likely to show strong rebounds, they are old news given timelier data suggesting that recoveries were slowing at the end of the quarter. An array of economic surveys for October are likely to add to evidence that the recovery is now stalling, if not going into reverse."