The pound sterling recovered sharply against the dollar and the euro on Wednesday, even temporarily gaining 1% against the latter, as the market regained some confidence in the negotiations between the European Union and the United Kingdom.

Around 3:15 p.m. GMT (5:15 p.m. in Paris), the pound gained 0.89% against the greenback, at 1.3006 dollars, and 0.90% against the European currency, at 91.09 pence for one euro.

Last week, it lost 3.6% against the two currencies, jostled by tensions in the negotiations on the post-Brexit relationship.

"Compromise talks (with rebel MPs) over the government's internal market bill appear to be giving the pound a boost," said CMC Markets analyst Michael Hewson.

This text aimed at reversing the first Brexit agreement, concluded last year, infuriated Europeans but passed a first stage in the British Parliament on Monday. However, his future is not all mapped out, as he arouses discontent even in the ranks of the majority.

"If the rebels rally, then the chances of a resumption of negotiations with the EU increase, Michel Barnier (the chief negotiator of the 27) not wanting to be seen as the one who withdraws", specified Chris Beauchamp, for IG.

Officially, the discussions have not stopped, but the British text has put a serious brake on it and has been seen as a provocation by Europeans.

Connor Campbell, an analyst for Spreadex, spoke for his part of "concessions on the side of the British over the disagreements on fishing".

The subject of the conditions of access for European fishermen to British waters is one of the main obstacles to a trade agreement between the two are expected to agree before the end of the year, or even before mid-October, a deadline mentioned by British Prime Minister Boris Johnson.

Any prospect of the talks breaking down weighs on the pound, as it would be seen by the markets as an economic disaster for the UK, while any progress is welcomed by investors.