Sterling rises after report EU to compromise on Irish border Brexit proposal

Sterling rose a quarter of a percent on Tuesday as hopes grew for a Brexit deal breakthrough, encouraging investors to buy the British currency with the struggling dollar also fueling gains.

The European Union is preparing to back a compromise proposal on the Irish border to resolve the last major hurdle in Brexit negotiations, the Times of London reported on Monday.

The British currency rose to a two-week high of $1.3085 in early London trading. Against the euro the pound rose 0.1 percent to 87.25 pence, close to a five-month high of 87.23 pence hit on Oct. 10.

Hopes of a deal have lifted the pound in recent days with the British currency rising 3 percent versus the dollar this month.