LONDON, (Reuters) - Sterling rose on Tuesday on the back of a broadly weaker dollar on U.S. presidential election day, ignoring that the European Union and Britain have so far failed to reach an agreement on three persistent sticking points in Brexit talks. The impasse suggests any breakthrough in securing a trade deal is still a way off, limiting sterling’s gains against the euro, though most investors remain hopeful a deal can be struck this month. Sterling was last trading up 0.6% at $1.3075, its highest in a week. The pound has gained about 4% in the last six months as the dollar’s strength faded. Versus the euro, the UK currency was up 0.3% at 89.76 pence. It has lost nearly 3% against the common currency in the last six months. Trading in the pound was calm earlier in the day, with investors rushing into the derivatives market to buy protection against unexpected near-term moves. Sterling overnight implied volatility gauges rose to their highest since March at nearly 19%, reflecting traders’ angst ahead of the U.S. election and expectations of near-term swings in the currency, with the time for a Brexit deal rapidly running out and England set to enter a coronavirus lockdown this week. “It’s a bit of a perfect storm for the pound,” said Neil Jones, head of European hedge fund sales at Mizuho. “There are three major factors of which the outcome is unclear - (U.S.) elections, COVID-19, Brexit - and that’s a solid backdrop for high volatility.” Opinion polls have consistently shown Democrat challenger Joe Biden leading U.S. President Donald Trump. Analysts said a Biden win could weaken the dollar as he is expected to spend big on stimulus and to take a freer approach to trade - boosting other currencies at the dollar’s expense, including the pound. “Market participants think ‘we’re not sure what the outcome is, but chances are sterling won’t stay where it is given these three major risk events’,” Jones said. Sterling fell on Monday on worries the new lockdown due to come into effect on Thursday in England will deliver another hard blow to the British economy and state finances. Britain’s financial watchdog said on Monday it would extend payment holidays on credit cards, car finance, personal loans and pawned goods. British Prime Minister Boris Johnson said on Monday self-employed workers would receive government support equivalent to 80% of their pre-crisis profits during November’s four-week lockdown in England, up from 40% previously.