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Market rates: GBP/EUR: 1.0920 | GBP/USD: 1.3226Bank transfer rates: 1.0715 | 1.2956Specialist transfer rates: 1.0845 | 1.3133More about bank-beating exchange rates, herePound Sterling is in for a potentially explosive session on Monday owing to a Sunday deadline for EU-UK Brexit talks.

If talks have not yielded progress by Sunday, the two sides have agreed to end them and pursue a 'no deal' Brexit.

The Pound is expected by analysts to fall sharply under such a scenario.

The market has rapidly raised the odds of a 'no deal' outcome over the course of the previous week, with a number of institutional analysts now saying such an outcome is their base-case expectation, whereas just last week it was hard to find anyone who would have suggested anything but a 'skinny' free trade deal was likely.

"Brexit fears are continuing to drive sterling underperformance, with hopes of a deal ahead of Sundays deadline fading with each passing day," says Joshua Mahony, Senior Market Analyst at IG.

The Pound bore the brunt of the market's growing anxieties, with the Pound-to-Euro exchange rate (GBP/EUR) being the clearest expression of that risk.

GBP/EUR fell to a low of 1.0835 on Friday, adding to Thursday's lofty 1.30% decline. However, ahead of the week's close it pared some of those loses to trade at 1.09.

As the outcome to talks is a binary outcome for Sterling there is a risk that selling the currency ahead of a dose of good news could prove costly.

The pair is nevertheless at its lowest level in two and a half months.

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Under such a scenario the Pound would be expected to rally into year-end.

"While a very close call, we continue to think the UK-EU trade deal is more likely than not. We can easily see the negotiations dragging beyond this Sunday," says Francesco Pesole, FX Strategist with ING Bank N.V. "We see an asymmetric GBP reaction function to the UK-EU trade negotiation outcome, with modest upside in the case of a deal but profound downside in the event of no deal as fairly limited risk premium is currently priced into GBP."

UK Prime Minister Boris Johnson raised the prospect of talks failing when he spoke to the press overnight and said it was time to prepare for an Australia-style Brexit, which is his term for a 'no deal' outcome.

Johnson honed in on the EU's insistence that the UK dynamically align with their rules in the future, showing this to be the key red line preventing a deal.

The dynamic alignment clause means that should the EU change its rules on business standards in the future, the UK must follow suit or risk being punished.

"It's vital that everyone now gets ready," said Johnson.

Johnson's focus on one specific area of the deadlock makes a public reinforcement of his key red line and prepares markets and the people of the UK for a 'no deal' outcome if it is not met.

Importantly though, it also sends the EU a signal that any notable shift on this one issue could potentially unlock a deal.

Until Wednesday's meeting of UK Prime Minister Boris Johnson and EU Commission President Ursula von der Leyen there was a widely-held assumption by foreign exchange analysts and political commentators that the impasse in talks was more likely choreography that would ultimately result in a deal.

However, subsequent reports of just how little progress was made at the meeting has lead to a rising fear the gulf between the two sides might in fact be too large to cross.