New York (awp/afp) - The pound remained lower against the dollar and the euro on Monday, but regained much of the ground lost earlier in the day, even as the British government was pessimistic about post-Brexit negotiations.

Around 20:30 GMT (21:30 in Paris), the pound was down 0.42% against the greenback, at 1.3384 dollars, and 0.33% against the euro, which was trading for 90.52 pence.

It had fallen more than 1% against both currencies during the European session, but recovered in the middle of the US session.

"It's quite disconcerting to see that the pound has taken back almost everything it had lost," said Shaun Osborne of Scotiabank.

"I think there is the underlying belief in the market that we will reach a very last-minute agreement or compromise by the end of the week, as is often done in European negotiations," the expert added.

The British government said on Monday that there was "every chance" that the negotiations started Sunday by the United Kingdom and the European Union to conclude a post-Brexit trade agreement would fail.

If London and the EU do not find a trade agreement, their trade will take place from 1 January according to the rules of the World Trade Organization (WTO), synonymous with customs duties or quotas, at the risk of a new shock for economies already weakened by the coronavirus.

For its part, the euro, which last week had reached two-and-a-half-year highs against the greenback, was close to balance against the US currency, giving up 0.05% to 1.2115 dollar.

In particular, foreign exchange traders are awaiting a decision from the European Central Bank this week at the end of its monetary policy meeting.

Economists expect the ECB's Governing Council to decide to increase its private and public debt buyback programme by at least €500 billion and extend it beyond June 2021, until at least December.

                     Monday Classes Friday Classes

21H30 GMT 22H00 GMT

EUR/USD 1.2115 1.2121

EUR/JPY 126.04 126.32

EUR/CHF 1.0789 1.0811

EUR/GBP 0.9052 0.9022

USD/JPY 104.03 104.17

USD/CHF 0.8905 0.8922

GBP/USD 1.3384 1.3441