The pound rose above $1.32 on Tuesday after labour data beat expectations, but investors said doubts that a Brexit deal would be reached at a European Union summit this week would limit the currency's advance.
Less than six months before Brexit, negotiators from both sides are trying to figure out how to keep the UK frontier with the Irish Republic free of border checks once Britain leaves the EU in March.
Some traders have been unwinding short positions on sterling, seeing potential for a breakthrough at Wednesday's EU summit in Brussels. But no agreement is in sight.
Still, the pound jumped on Tuesday after data showed that British workers' basic wages rose at their fastest pace in nearly a decade over the summer months.
The currency rose 0.4 percent to $1.3210 against the dollar. It gained 0.3 percent to 87.75 pence against the euro.
Source : Reuters