Sterling Flat After Reports May Will Reject EU’s Irish Border Offer - The pound struggled for direction Wednesday after reports that UK Prime Minister Theresa May was set to reject the European Union’s Irish border solution.

GBP/USD bounced back slightly, but was still down 0.08% to 1.3138 as of 7:38 ET (11:38 GMT) after slumping to a low of 1.3099.

The EU had suggested having more checks only in Northern Ireland, but May is expected to reject their offer, insisting that any solution must be UK-wide, The Times reported.

The EU’s chief Brexit negotiator Michel Barnier previously suggested that checks would need to be carried out at British and Northern Irish ports on only one category of goods moving from Great Britain to Northern Ireland.

Four categories of goods would be affected if the backstop took effect and Northern Ireland was to remain in the EU customs union and single market.

May is currently in Salzburg, Austria to discuss Brexit with European leaders. If informal talks do not go well, there will be little hope among investors of a deal when the UK officially leaves the EU in March.

Meanwhile, UK Treasury minister Mel Stride said there could be a second Brexit referendum if May's Chequers proposals are rejected by a vote in the House of Commons, putting increased pressure on May as the Brexit negotiation deadline approaches.

The euro rose against the pound, with EUR/GBP up 0.15% to 0.8885.