GBP rose against its major rivals in the European session on Tuesday as market participants digested the latest news on the progress of the UK-EU trade talks.

Bloomberg reported on Tuesday, citing people familiar with trade negotiations, that the UK and EU could strike a deal early next week as the two sides edge closer to an agreement on the biggest sticking points. The report said that as talks continue in Brussels, officials are planning for the possibility of a breakthrough to be announced as soon as Monday, although no precise day has been settled on, people familiar with the discussions said. However, the article added that there was still the potential for negotiations to collapse. Meanwhile, the Sun reported that the UK’s chief Brexit negotiator David Frost told Prime Minister Boris Johnson there was a “possible landing zone” that could be reached as early as next Tuesday.

However, the European Commission spokesman Eric Mamer declined to comment on reports suggesting that the deal could be done next week. "What is clear is that we continue to negotiate intensively with our UK partners and we aim, obviously, to find a deal when the conditions will be there," he said, adding "We are not going to give a blow-by-blow account of what negotiators are working towards".