LONDON: Sterling slipped on Thursday but still held near a three-month high, as US dollar weakness offset some of the uncertainty about the outcome of Brexit talks.

Traders are looking for progress on a trade deal between Britain and the European Union, with a successful deal priced in but fears persisting that the discussions could break down.

The head of the EU executive, the Commission, reported "genuine progress" on Wednesday but said the risk of Britain leaving the bloc without a deal on Dec. 31 remained.

Sterling, in common with British stocks, has largely shrugged off finance minister Rishi Sunak's unprecedented spending plans announced on Wednesday, as Britain looks to borrow about 400 billion pounds ($535 billion) to pay for the Covid-19 hit to the economy. The pound was down 0.43% at $1.3329 by 1540GMT after hitting an early September high of $1.3399 in Asian trading. It also fell against the euro to 89.3 pence.

With a lack of major scheduled news on Thursday, sterling traders said they were watching for any official or unofficial news on the Brexit talks, with negative signals likely driving bigger price swings because a positive outcome is expected.