The British pound fell from its highest level in almost five months versus the U.S. dollar on Wednesday as investors started to question their optimism about Britain's negotiations to leave the European Union.

Sterling also pulled back from its highest in five months against the euro as investors booked profit and prepared for a make-or-break summit between Britain and the EU on Thursday and Friday.

The focus is on last-ditch talks that dragged on late into Tuesday night to see whether the two sides can draft an agreement on Brexit before the summit.

The pound fell 0.20% to $1.2758, pulling back from a five-month high of $1.2800 reached on Tuesday.

Against the euro, the British currency fell around 0.23% to 86.51 pence. On Tuesday, sterling hit 86.25 pence per euro, the strongest since May 10. The dollar index against a basket of six currencies rose slightly to 0.03% to 98.322.

Source : Reuters