Sterling climbs against euro and dollar on hopes for Brexit breakthrough

European Union's chief Brexit negotiator Michel Barnier. Picture: Francois Lenoir, Pool Photo via AP

Sterling rallied against the dollar the most in more than a week, as speculation grows British and European officials are getting closer to striking a trade deal.

Sterling rose as much as 0.9% to $1.3441, extending gains after Times Radio’s political correspondent Tom Newton Dunn wrote on Twitter that both sides have entered the so-called tunnel in Brexit trade talks, a period of intensive negotiations that forms the precursor to any deal.