* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
By Daniel Leussink
TOKYO, March 12 (Reuters) - Sterling rose sharply on Tuesday as speculation swirled that British Prime Minister Theresa May might be closer to securing approval for her Brexit deal.
The pound extended earlier gains as May won legally binding Brexit assurances from the European Union, in a last ditch attempt to sway rebellious British lawmakers who have threatened to vote down her divorce deal in a parliamentary vote on Tuesday. GBP=D4 , jumped as high as $1.3290 as some investors bolstered bet the prime minister could secure a divorce deal before Britain's scheduled March 29 departure from the EU.
The pound was last trading 0.6 percent higher on the day at $1.3223, having been as low as $1.2945 at one stage on Monday.
The euro slid to its lowest on the pound since mid-2017 at 84.71 pence EURGBP=R . It was last quoted down about 0.4 percent on the day at 85.15 pence.
At a joint news conference with European Commission head Jean-Claude Juncker late on Monday, May announced three documents aimed at addressing the most contentious part of the exit deal she agreed in November - the Irish backstop.
"Seeing them together in the same screen, is a positive - that there is some hand holding there and working together to move forward," said Bart Wakabayashi, Tokyo branch manager at State Street (NYSE:STT) Bank.
The Irish backstop is an insurance policy aimed at avoiding controls on the sensitive border between the British province of Northern Ireland and EU member Ireland.
"If they can break (the backstop) down to a level where there can be some negotiation or at least compromise on both sides, there definitely does seem (to be) light at the end of the tunnel," added Wakabayashi.
If May loses the vote on Tuesday, she has said lawmakers will get a vote on Wednesday on whether to leave without a deal and, if they reject that, then a vote on whether to ask for a limited delay to Brexit.
Most other currencies stayed within familiar trading ranges before U.S. February inflation figures expected later on Tuesday.
The dollar index, which measures the greenback against a basket of six rivals, fell almost 0.2 percent to 97.063 .DXY on a modest improvement in investors' risk appetite.
Against the Japanese yen, a safe-haven currency often bought in times of rising volatility, the dollar was 0.2 percent higher at 111.43 yen JPY= .
Data on Monday showed U.S. retail sales rose modestly in January, lifted by an increase in purchases of building materials and discretionary spending, but a drop in December was even larger than initially thought. euro EUR= found support against the dollar on the Brexit news and the improvement in risk appetite. The single currency was last up about 0.15 percent at $1.1259.
(Editing by Kim Coghill)