‘Pound whisperer’ Michel Barnier keeps sterling buoyant

Currency also strengthened by figures showing UK wage growth was ahead of expectations in three months to July

Sterling opened trading up against the dollar on Tuesday, following a boost due to more positive Brexit comments from the EU’s chief negotiator, Michel Barnier, dubbed the ‘pound whisperer’ by analysts.

The pound was up 0.4 per cent against the dollar at $1.3073, while the euro was also up against the greenback, by 0.28 per cent to $1.1626.

Sterling starting the trading session on an upward trend after Mr Barnier said on Monday that a Brexit deal by November is ‘realistic’.

“I think that if we are realistic we are able to reach an agreement on the first stage of the negotiation, which is the Brexit treaty, within 6 or 8 weeks,” he said, in a speech at a conference in Bled Slovenia.

“Taking into account the time necessary for the ratification process, the House of Commons on one side, the European Parliament and the Council on the other side ... we must reach an agreement before the beginning of November. I think it is possible.”

Connor Campbell, financial analyst at Spreadex, said Mr Barnier’s “pound-whisperer act” was the reason the pound had hit multi-week peaks.

“The EU’s chief negotiator had said that a first stage agreement within six or eight weeks was a ‘realistic’ prospect, something that sent sterling – which recently has jumped on far, far less – rocketing higher against the dollar and the euro,” Mr Campbell said.

Meanwhile, Hussein Sayed, chief market strategist at FXTM, said: “With many short positions being accumulated over the past several weeks, traders should expect a further rally in the pound if more progress is achieved.

"However, to see a meaningful rally, UK MPs need to come together, but so far deep divisions persist.”

The pound was also strengthened on Tuesday by economic data from the Office for National Statistics, which showed wage growth was ahead of expectations in the three months to July.