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GBP/EUR spot rate at time of writing: 1.0988Bank transfer rate (indicative guide): 1.0703-1.0780FX specialist providers (indicative guide): 1.0827-1.0911More information on FX specialist rates hereHopes for an imminent breakthrough in post-Brexit trade talks have been dashed by news the EU has rejected the UK's latest offer on access to its fishing waters.

Pound Sterling lost ground against the Euro, Dollar and other major currencies after news the EU was not prepared to give up 30% of its current quota at some point in the future.

Hopes had been growing that a deal would be possible given reports of movement on fisheries by both sides.

But a prominent market newswire has subsequently reported in late Tuesday morning trade in London that the EU had rebuffed the UK's latest concession on fish.

The Pound-to-Euro exchange rate shed a third of a percent of its value to go 1.0963, the Pound-to-Dollar rate shed an equal amount to fo to 1.34.

Losses do appear to be relatively contained, for now.

Two sources close to talks told Bloomberg the EU has rejected an offer that would have seen the value of the fish the EU catches in UK waters shrink by 30%.

The UK last week pushed the EU to accept a 60% cut, but it is believed the EU has refused to accept a reduction of more than 25%.

Above: GBP/EUR volatility on Dec. 22.

The EU's retaliation mechanism in the event that the UK restricts EU fisheries access in the future is also being contested.

It is reported the UK is opposed to an EU demand that they should be allowed to deploy retaliatory tariffs on UK exports should the UK lower quotas for EU fishermen in the future.

The UK is said to be prepared to accept penalty tariffs on fish, but not in other areas.

The Pound had fallen sharply at the start of the new week, amidst ongoing signs of deadlock in talks and growing market anxieties over a new variant of the SARS-CoV-2 virus.

But sentiment had firmed on Tuesday after a number of UK newspapers reported progress in negotiations and on observations that fears about the new strain of the virus might be overblown.

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The Telegraph reported the two sides moved closer to a compromise on fisheries on Monday night and MPs were told to prepare to vote on a potential trade deal on Wednesday next week.

According to the newspaper, the UK tabled an 11th-hour proposal that would see the bloc slash the value of its fishing catch in UK waters by roughly a third over a transition period of five years, it was claimed, down from an initial demand to cut it by 60% over three years.

But it now appears that this source of hope has been dashed by the latest headlines.

In the wake of the rejection of the UK's latest offer, The Guardian reports some EU member states are being asked to reconsider.

.@MichelBarnier says "we are giving it the final push" and that talks are at a "crucial moment". In ten days the UK will leave the transition period . He will now brief EU ambassadors. pic.twitter.com/TRKlVxrbd8

— James Crisp (@JamesCrisp6) December 22, 2020The newspaper reports EU Commission President Ursula von der Leyen's request is pointed at France and Denmark in particular.

"France and Denmark are understood to be the most cautious about making a counter-proposal, budging from their current demand that their vessels lose only 25% by value of the fish they catch in British waters," says the report.

By all accounts UK Prime Minister Boris Johnson continues to talk with von der Leyen, with reports of talks having taken place on Monday and Tuesday. Talks between the EU Commission - who oversee negotiations - and EU countries with most interest in fisheries are also taking place.

"The pathway to a deal is still a political 'horeography and the timing is important; it might take a little more brinksmanship to make compromise palatable, perhaps similar to how progress has reportedly been made on the “level playing field” issue," says Zach Pandl, an economist with Goldman Sachs.

Goldman Sachs maintain a base-case expectation for a 'thin' Free Trade Agreement to be reached by year-end and continue to think investors should stay 'long' Sterling.

Goldman Sachs forecast the Pound-to-Euro exchange rate at 1.15 if a deal is reached.

As long as the two sides remain locked in negotiations we would expect any major moves in Sterling to be faded and the big directional moves either higher or lower will only come once a 'deal' or 'no deal' outcome occurs.