* Johnson sets new Brexit deadline at end of 2020 - ITV
* Pound falls 0.7%, further away from 1 1/2-year peak
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Hideyuki Sano
TOKYO, Dec 17 (Reuters) - The British pound fell on Tuesday
after reports UK Prime Minister Boris Johnson was seeking a hard
line on Britain's transition period after Brexit, effectively
creating a new cliff in its negotiations with Brussels.
Sterling dropped as much as 0.7% to $1.3236 GBP=D4 , as its
Friday's 1-1/2-year peak of $1.3516 looked increasingly like a
near-term peak following the massive relief rally after last
week's UK election.
Johnson's revised Withdrawal Agreement Bill would require
the United Kingdom to have arrangements to leave the European
Union be in place by Dec. 31 next year, UK broadcaster ITV
reported on Monday. The move dashes hopes Johnson would take a flexible approach
to the end-2020 deadline for a trade deal with the EU after
Britain leaves the bloc, which now looks almost certain to
happen on Jan. 31 following the landslide Conservative election
"Common sense suggests that crafting a trade deal would take
at least more than a year, so markets had assumed that the
transition period will be extended," said Masafumi Yamamoto,
chief currency strategist at Mizuho Securities.
"It seems like the big majority Johnson won is enabling him
to take a hard line approach, which the market doesn't like so
much... Considering the UK economy looks set to deteriorate as
people and companies start to leave the country because of
Brexit, sterling's short-covering rally is over," he added.
Other major currencies saw limited moves as investors
sought more details on an interim trade deal the United States
and China struck last week. The deal has broadly capped
safe-haven currencies, such as the yen, and supported
risk-sensitive currencies.
Against the yen, the dollar traded at 109.56 yen JPY= , up
0.05% from late U.S. levels, having gained 0.15% on Monday to
edge near six-month high of 109.73 hit on Dec. 2.
The euro stood at $1.1147 EUR= , maintaining its uptrend
from its seven-week low of $1.1098 touched on Nov. 29.
The deal, announced on Friday after more than two-and-a-half
years of volatile negotiations between Washington and Beijing,
will reduce some U.S. tariffs on Chinese goods in exchange for
increased Chinese purchases of some U.S. goods.