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Britain's pound fell on Monday as concern rose that the country is heading for a "hard" Brexit from the European Union and its single market, a day before a speech by Prime Minister Theresa May on the government's plans. Some British newspapers have billed May's speech on Tuesday as a shift away from preferential EU single market access - in order to win restrictions on immigration - and a toughening of the UK's stance toward an economic bloc that accounts for roughly half its exports and imports. A spokeswoman for May, who will also attend a gathering of the world's economic elite in Davos, Switzerland, this week, called the reports about the tone of her upcoming speech "speculation".
By Tom Körkemeier and Andreas Rinke BRUSSELS/BERLIN (Reuters) - Germany's Foreign Minister said on Monday that U.S. President-elect Donald Trump's comments that NATO was obsolete had aroused concern across the 28-member alliance. Frank-Walter Steinmeier, speaking after a meeting with alliance Secretary-General Jens Stoltenberg in Brussels, said Trump's remarks contradicted views expressed by designated Defense Secretary James Mattis. "I've spoken today not only with EU foreign ministers but NATO foreign ministers as well and can report that the signals are that there's been no easing of tensions," Steinmeier told reporters when asked about Trump's interview with Bild newspaper and the Times of London.
The pound slumped Monday on reports British Prime Minister Theresa May was ready to take the country out of the European Union in a so-called "hard Brexit". Sterling's weakness sent London's FTSE 100 index to a fresh record high, although the index later fell back and closed with a slight loss, ending a record 14-session winning streak. "The main action today has been on the currency market with the pound sliding to its lowest levels since the October flash crash, below 1.2000 against the US dollar, as markets price in further uncertainty ahead of tomorrows scheduled speech by UK Prime Minister Theresa May about how the UK intends to conduct its Brexit negotiations," said Michael Hewson, chief market analyst at CMC Markets UK.