Sterling hovered around the $1.30 mark but was set to snap a three-week losing streak as investors waited to see if last-minute Brexit talks can yield tweaks to the withdrawal agreement.

The pound is headed for a 1.2% rise for the week, breaking three consecutive weeks of losses. 

On a weekly basis,it was also the best performing currency among its major rivals.

It was broadly flat in afternoon trade after jumping up and down on mixed messages about progress in UK-EU talks.

Against the euro, sterling was also unchanged at 86.97p.

"Without a breakthrough in Brexit talks it will be difficult for sterling to go through these levels," said MUFG currency analyst Lee Hardman, referring to the $1.30 and 87 pence per euro levels around which the pound has jumped back and forth inrecent sessions.

The European Union's Brexit negotiator, Michel Barnier, said he could not rule out the possibility that Britain's EU withdrawal would be pushed back.

Britain is due to leave the EU on March 29th, but Prime Minister Theresa May is seeking further concessions on her Brexit deal in hope of winning the support of lawmakers before putting it to another vote in parliament.

If she fails, May will have to decide whether to delay Brexit or endanger the world's fifth largest economy by leaving without a deal.

May has promised to give parliament a chance to decide what to do about Brexit on February 27th unless she can bring back a deal.

Optimism about some sort of an imminent breakthrough is reflected in the currency derivatives markets with one-month pound risk reversals rising to a month high.

However, some analysts say the upside is limited for the pound in the short term as a deeply divided parliament might present significant hurdles for any concessions that May can wrangle out of the European Union.