"We are coming to a stage where the markets believe that a deal may be on the cards and sentiment is not that negative towards sterling as it was a few weeks ago", said Manuel Oliveri, an FX strategist at Credit Agricole in London.
GBP and Euro are both climbing in Europe after the results of the USA mid-term elections, which have led to United States dollars weakness. The Irish border issue remains unresolved, little progress has been seen on trade negotiations and terms of the United Kingdom remaining within the EU's customs union post-Brexit, and the skeletons of any kind of a plan have yet to be seen, but London markets are remaining hopeful that a plan for the upcoming European divorce will see a satisfying resolution in time for the final Brexit date next March.
Senior Cabinet members are said to have agreed that they want an agreement in place by the end of November, bolstering hopes that Theresa May has managed to win support for her Brexit plans. United Kingdom officials are now said to be working on the details of the proposal, which could involve a temporary customs agreement with the European Union that does not mean a border between Ireland and the United Kingdom mainland.
GBP, which has been most sensitive to Brexit developments, is now well placed to advance further despite comments by Irish Prime Minister Leo Varadkar suggesting that the chances of a withdrawal agreement this month are fading, while next month remains a possibility. That has helped allay fears of a Eurozone economic slowdown and has already led to a firmer currency.
In absence of any major market moving United Kingdom economic releases, the incoming Brexit headlines might continue to influence sentiment surrounding the British Pound and produce some meaningful trading opportunities.