UK Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar see "a pathway to a possible deal" on Brexit after a Thursday meeting, Johnson's office said in a statement.
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"Both continue to believe that a deal is in everybody's interest. ... Their discussion concentrated on the challenges of customs and consent. They also discussed the potential to strengthen bilateral relations, including on Northern Ireland," the statement said.
The pound jumped sharply from trading at $1.2218 against the U.S. dollar to $1.2269 after Johnson and Varadkar's meeting.
Those watching the negotiations closely saw the statement as a small, but positive, sign.
"From the tone of the statement seems there's been a bit of progress, but may well only have been stepping a few inches towards each other, when they started miles apart," BBC's Laura Kuenssberg wrote on Twitter on Thursday.
"It is possible to come to an agreement to have a treaty agreed to allow the UK to leave the EU in an orderly fashion and to have that done by the end of October," Varadkar said at a press conference following the joint release of the statement, The Guardian reported.
Among other things, the proposal would remove the so-called Irish backstop provision that would prevent a hard border between the independent Republic of Ireland, which is remaining in the EU, and Northern Ireland, which would leave along with Britain.
The boundary was the source of a bloody conflict that lasted for decades before a peace agreement was signed in the late 1990s, but some British residents fear the backstop provision would obligate them to follow EU rules without having a voice in making them.
Brexit Secretary Stephen Barclay will meet with EU Brexit negotiator Michel Barnier on Friday.
An Oct. 17 and Oct. 18 EU summit could be the final chance for the two parties to come to a deal before the deadline, BBC reported.