The pound took off after the EU's chief Brexit negotiator said a deal could be just weeks away

LONDON – The pound surged higher on Monday afternoon after conciliatory comments from the EU’s chief Brexit negotiator Michel Barnier.

Speaking at a conference in Slovenia on Monday afternoon, Barnier said that a Brexit deal could be between six and eight weeks, calling such an outcome both “realistic” and “possible.”

Barnier’s words were welcomed by investors in the pound, which jumped to a gain of just over 1% against the dollar to hit a peak of $US1.3052. A few minutes after the initial increase, the pound has pared some of its gains and is trading 0.87% higher at $US1.3032 as of 2.25 p.m. BST (9.25 a.m. ET).

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In recent weeks, the pound has been extremely sensitive to positive developments surrounding Brexit. Last Wednesday, the pound jumped sharply against the dollar after a report suggested Germany had agreed to a significant compromise with the UK during Brexit talks.

On that occasion, the pound climbed close to 1% when Bloomberg reported that German officials were prepared to “accept a less detailed agreement on the UK’s future economic and trade ties with the EU in a bid to get a Brexit deal done.” It soon dropped after an official statement from the German government saying its position had not changed.

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