The British pound took center stage again on Tuesday, rising sharply against the dollar and euro on renewed speculation of a deal to allow the U.K. to leave the EU smoothly at the end of the month.
By 3 AM ET, GBP/USD was at $1.2667, up 0.5%, while EUR/GBP was at 0.8715, down 0.3%.
The latest wave of optimism was fueled by comments from the EU’s top negotiator Michel Barnier, who told reporters that a deal at a summit at the end of the week “is still possible”.
The prospect of a Brexit deal has also helped the euro against the dollar. EUR/USD rose 0.1% to $1.1037 by 3 AM. The dollar index, which measures the greenback against a basket of developed market currencies, fell 0.2% to 98.035, its lowest since Friday.