The pound gained after the UK and European Union agreed on Sunday to continue Brexit talks and the EU's chief negotiator said a deal was still possible.
Britain said the door was still open if the European Union wanted to make some small concessions, but that unless the bloc budged there would be a no-deal exit in 10 weeks.
The currency rose as much as 0.5pc extending its run to a high of $1.3184, its highest since March 9, before easing a touch to $1.3112, up 0.3pc on the day.