The pound rose sharply Oct. 10 after U.K. Prime Minister Boris Johnson and Irish Prime Minister Leo Varadkar said a "pathway" to a potential Brexit deal was in sight, with only three weeks left until Britain's scheduled departure from the EU.
Johnson's office said in a statement that the two leaders held "detailed and constructive" discussions ahead of a crucial European Council summit on Oct. 17-18.
"Both continue to believe that a deal is in everybody's interest. They agreed that they could see a pathway to a possible deal," Downing Street said.
Officials would continue to engage "intensively" on the issues discussed by the prime ministers, including customs and Northern Ireland, according to the statement.
Varadkar said after his meeting with Johnson that it is still possible to reach an agreement by the Oct. 31 deadline that would allow for an "orderly" Brexit, Reuters reported.
"I do see a pathway to an agreement in coming weeks," Varadkar was quoted as saying in the report.
The pound was up 1.88% against the U.S. dollar shortly after 2:30 p.m. ET and rose 1.52% against the euro.
Johnson's government and the EU remain at odds over the proposed backstop solution for the Irish border, which is a key part of the Brexit deal struck by former U.K. Prime Minister Theresa May.
The U.K. recently proposed an alternative arrangement that would replace the backstop in a new Brexit deal, but the EU rejected the proposal.
During Johnson's meeting with Varadkar, the U.K. proposed a "pared-down" free trade agreement to break the Brexit impasse and pave the way for a withdrawal agreement, Sky News reported, citing sources in Brussels.
