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Market rates: GBP/EUR: 1.1061 | GBP/USD: 1.3505Bank transfer rates: 1.0850 | 1.3227Specialist transfer rates: 1.0980 | 1.3410More about bank-beating exchange rates, hereThe British Pound has fallen at the start of a holiday-shortened week, with losses coming despite the positive news out last Thursday that the EU and UK had struck a post-Brexit free trade deal.

The deal puts an end to years of uncertainty and most financial analysts we follow are in agreement that there should be further upside in Sterling over coming days and weeks.

For now however, the 'buy the rumour, sell the fact' reaction to the news of an announcement looks to be playing out further:

The Pound-to-Euro exchange rate is trading half a percent lower on the day's opening at 1.1060, the Pound-to-Dollar exchange rate is trading 0.40% lower at 1.3520.

"For the pound, the response is uninspiring and suggests that most of the good news was priced in last week. The unwinding of the premium in downside GBP strikes against G10 currencies incl USD and EUR levelled off on Thursday but resumes this morning," says Kenneth Broux, analyst at Société Générale.

The EU and UK reached a trade deal on Christmas Eve that means there will be no tariffs placed on the trade in goods between the EU and UK, however the trade in services - which accounts for the majority of UK economic productivity - is largely excluded from the deal.

"The deal is far from perfect, being skinny and not including much in important areas such as financial services or even being as good as the status quo. Where previously there has been friction-free trade between the UK and EU for over forty years, now there will be friction," says Gavin Friend, Senior Market Strategist at NAB.

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"Hope are that the deal struck on goods can be the foundation for a deal on services and temporary equivalence can be agreed beyond the area of clearing and encompass shares and derivatives trading as well as advisory services," says Broux.

Analysts warn that while the trade in goods will be excluded from tariffs and quotas, there will be an element of friction at the UK borders from January 01.

"Border and custom checks will add red tape and will incur costs for businesses," adds Broux.

A concern for the longer-term outlook for the British Pound is the question of Scottish independence, with Broux saying tensions over the Union could return next month when a court case decides if the Scottish parliament has the power to hold a second vote on independence independent of consent from Westminster.

The Pound struggled in 2014 in the run up to the referendum and rose sharply following the vote to keep the UK intact, confirming it is an issue with the ability to substantially impact on Sterling.

It is worth remembering that market liquidity is very thin at the current time, owing to the holidays, and therefore we will need to wait for market participants to return before we get a full sense of where the markets are going to take Sterling.

Will the expectation for further modest gains that most analysts hold play out when markets are back in full flow in January? Or is the Pound destined to stay connected to 1.11 against the Euro and 1.35 against the Dollar for the foreseeable future?