FOREX-Fresh ECB stimulus leaves euro unabated, pound hit by Brexit fears

* ECB expands asset purchases at policy meeting
* Pound falls as Brexit deadline extended to Sunday
* Dollar slightly weaker as further U.S. stimulus discussed
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E

By Julien Ponthus
LONDON, Dec 10 (Reuters) - The euro rose on Thursday after
the European Central Bank unveiled fresh stimulus measures
broadly in line with expectations, while sterling fell after
post-Brexit trade talks were extended to the weekend in hope of
an elusive breakthrough.
The ECB increased the overall size of its Pandemic Emergency
Purchase Programme by 500 billion euros ($605.40 billion) to
1.85 trillion euros and extended the scheme by 9 months to March
2022, with the aim of keeping government and corporate borrowing
costs at record lows.
The move did not surprise investors as the central bank had
made it clear more easing was on the way and bond purchases,
along with liquidity facilities for banks, would form the
backbone of any policy response.
The euro, which was about 0.1% up against the dollar prior
to the announcement, rose to 0.3% and reached a session high at
$1.2118.
Traders were still awaiting a press conference by ECB head
Christine Lagarde for any comment on the recent rise of the
currency on foreign exchange markets.
Among other positive developments for the euro zone, EU
leaders in Brussels seemed close to unblocking a stalled 1.8
trillion euro package to help revive their pandemic-ravaged
economies.
Poland and Hungary have opposed the package because access
to the money was, for the first time, to be linked to respecting
the rule of law.
Against the pound, the euro EURGBP=D3 rose 1% to 91.10
pence, while sterling GBP=D3 sustained losses of 0.8% against
the dollar, retreating to $1.3295.
The British currency fell overnight after British Prime
Minister Boris Johnson and European Commission President Ursula
von der Leyen gave negotiators until the end of the weekend to
decide if a trade pact can be struck.
The European Commission laid out contingency plans for a
'no-deal' Brexit at the end of the year to limit disruption to
air traffic, and road and rail travel.
Bank of England Governor Andrew Bailey has said a no-deal
Brexit would cause more lasting damage to Britain's economy than
the COVID-19 pandemic. The Swiss franc EURCHF=EBS , seen as a safe haven in the
Brexit crisis, briefly rose to 1-month high versus the euro in
morning trading but cut its gains gradually.
At 1301 GMT one euro was exchanged for 1.07525 Swiss franc.
The dollar rose 0.2% slightly to 104.41 yen JPY= .
The U.S. dollar, which tends to fall when risk appetite is
strong, was down 0.2% against a basket of major currencies as
agreement on U.S. stimulus remained elusive. = 0.8259 euros)