Sterling extended gains on Wednesday, rising above $1.35, after Reuters reported the EU was preparing for the provisional application of a UK trade deal and member states had been informed of a meeting on Thursday should a deal be finalised.
A Brexit deal is in sight, the Sun newspaper reported.
The pound which had earlier firmed on the lifting of a French border blockage extended gains to trade up 1% by 1415 GMT at $1.3503. Against the euro, the pound jumped 0.8% at 90.27 pence.
Euro zone government bond yields rose after the report with Germany’s 10-year yield up 5 bps while a pan-European equity index hit a session high, up nearly 1%.