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The pound drifted higher against its major counterparts in the European session on Friday, amid hopes of progress in reaching a Brexit deal following constructive talks between Irish Prime Minister Leo Varadkar and U.K. Prime Minister Boris Johnson on Thursday.

Johnson and Varadkar released a joint statement saying that they "could see a pathway to a possible deal"

Varadkar told that there is a chance of reaching a Brexit deal by the end of October, enabling the UK to quit the EU in an orderly fashion.

European Council President Donald Tusk said that he had received promising signals from Leo Varadkar indicating that a deal is possible.

U.K. Brexit Secretary Stephen Barclay and EU chief negotiator Michel Barnier are meeting in Brussels to discuss the details of a potential deal.

The pound appreciated to 1.2686 against the greenback, its strongest since July 1. The pound is seen facing resistance around the 1.30 level.

The pound spiked up to more than a 3-month high of 137.47 against the yen from Thursday's closing value of 134.25. On the upside, 142.00 is likely seen as the next resistance level for the pound.

The pound climbed to a 4-month high of 1.2644 against the franc, compared to 1.2392 hit late New York Thursday. Next immediate resistance for the pound is seen around the 1.28 level.

The U.K. currency firmed to 0.8719 against the euro, a level unseen since May 16. The currency is likely to locate resistance around the 0.86 level.

Final data from Destatis showed that Germany's consumer price inflation slowed as initially estimated in September to the lowest since early 2018.

Consumer price inflation slowed to 1.2 percent in September from 1.4 percent in August. This was the lowest rate since February 2018, when the rate was 1.1 percent.

Looking ahead, Canada jobs data for September, University of Michigan's consumer sentiment index for October and U.S. import and export prices for September are due in the New York session.