Sterling hit 1.127 against the euro and 1.329 against the US dollar, amid hopes Theresa May would help move along negotiations over Britain’s exit from the European Union (EU).
Last week, the pound dropped after Mr Barnier said there had not been enough progress, raising fears that the EU would refuse to begin Brexit trade talks.
However, it’s hoped the Prime Minister will break the deadlock ahead of a summit on Thursday when EU member states will decide whether the next phase of negotiations can start.
The pound has been heavily affected by Brexit developments in recent months.
Fears of a no deal tend to prompt a sterling sell-off.
Connor Campbell, financial analyst at Spreadex.com, said: “Ahead of the week’s EU summit Theresa May is reportedly set to host a private dinner for her, Brexit secretary David Davis, EU chief negotiator Michel Barnier and European Commission president Jean-Claude Juncker in order to help break the ‘disturbing deadlock’ between the two sides and, in turn, help nudge the EU towards green-lighting trade talks at the end of the week.
“This News seems to have helped buoy the pound, which is keeping above $1.33 against the dollar, while surging to a fresh 2 week peak against the euro with a 0.3 per cent rise.”
At the same time, fears over Catalan independence could also ne eighing on the euro.
The Spanish stock market has also been hit by the political developments in the country.
Craig Erlam, senior market analyst at Oanda, said: “Spanish shares are once again underperforming their European counterparts after Catalan leader Carles Puigdemont opted not to clarify whether or not independence had been declared, having been given a deadline of 10am local time to do so.
“Instead Puigdemont once again called for dialogue with Madrid over the next two months, which once again suggests independence is possibly not the aim of the government, at least not against the will of the Spanish authorities.”
Source : EXPRESS