There has been a significant breakthrough in Brexit talks between the UK and European Union, prompting sterling to soar against the US dollar and euro amid hopes a deal has been agreed.
Sources have told the BBC and other media organisations the draft deal has been agreed by officials from both sides after intensive discussions this week.
UK Prime Minister Theresa May has called an emergency Cabinet meeting for 2pm tomorrow (Wednesday 14 November) but is also meeting ministers tonight to give a first glimpse of the draft deal.
Sterling leapt 1.4% to trade at $1.3036 against the dollar in afternoon trading, while against the euro it jumped to a near seven-month high of €1.1542.
However, if the Cabinet does not agree the deal on Wednesday the pound's rally is likely to be short-lived.
Helal Miah, investment research analyst at The Share Centre, commented: "The pound has had a rollercoaster ride lately and today it has been on an upward trajectory today chiefly on the optimism of a deal being agreed on the Brexit negotiations.
"However, no details have been released as yet, but MPs and ministers are being summoned one by one tonight and the pound will gyrate according to how individual ministers and MP's react to the details revealed to them when they speak to the media or tweet out their response, if allowed to do so.
"It could be the case that many will not like what they see and may hand in their resignations, so this evening can expect some further sharp movements in sterling in both directions. Nothing is final yet until the cabinet and the UK parliament accept the terms by voting on the final agreement."
According to reports, former foreign secretary Boris Johnson has said May is on the brink of "total surrender" to the EU and has called for a Cabinet mutiny against her draft withdrawal agreement.
IG's market analyst Joshua Mahony agrees we are not out of the woods yet, saying: "While Barnier and May will have you believe that we are on the cusp of a final deal, this could be just the beginning, for a convincing rejection from Parliament or the EU nations could go a long way to highlighting exactly how far we are from any form of positive resolution."
Aberdeen Standard Investments' political economist Stephanie Kelly added: "This is certainly an achievement of sorts and no one can be under any illusion about how hard it has been to get to this position. But we are not at an end stage yet. The devil will be in the detail of the Irish border issue. Everything hangs on that and ultimately whether Theresa May can get this past Parliament.
"There's a sword of Damocles hanging over Theresa May and it's being wielded by her own MPs. She still has to convince them and the rest of parliament and that's not a foregone conclusion by any means."
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