The pound made a profit, even when the underlying economic data was weaker than expected, as the market preferred to focus instead on signs of progress at the Brexit talks.

The currency strengthened on Monday after the Sunday Times reported that Prime Minister Theresa May had made concessions from Brussels to allow her to keep the whole of Britain in a customs union with the European Union. The currency remained higher even after a report showed that the services sector slowed in October. The sterling can "break through" $1.35 within two days if a divorce is agreed between the UK and the bloc.

According to a British survey by Bloomberg last month, the British currency could recoup about half of its decline by more than 10 percent from Brexit's level if there is a divorce agreement. The positioning of the trader in the currency has sharply decreased, since the missed deadlines for negotiations over the past months have raised heightened concern about the lack of a deal.

However, the road to any deal is likely to be bumpy. Over the next few weeks, the sterling will continue to depend on the headline, and recent fluctuations mean "instability, which is possible with constant political uncertainty.