UPDATE 3-Sterling shoots above $1.30 in jittery trade before Brexit

Sterling shot past $1.30 on Tuesday on hopes that Prime Minister Theresa May can win concessions from the European Union for her Brexit deal, although traders struggled to explain the size of the move. After edging higher for much of the day, the pound then jumped in late European trading - rising almost one percent versus the dollar by 1615 GMT to hit its strongest since Feb. 5 . The pound was headed for its biggest one-day gain since January.

Against the euro, the British currency also extended its earlier rise, adding 0.7 percent to 86.92 pence per euro . "I'm fairly certain it's not news-related and it's due to technical factors," said Neil Mellor, a currencies analyst at BNY Mellon, referring to some large buy orders reportedly in the market and triggered when sterling hit $1.30.

May will meet EU Commission chief Jean-Claude Juncker in Brussels on Wednesday, pressing on with efforts to find a way to get their Brexit deal through Britain's parliament. . Relatively strong labour market data published earlier on Tuesday also helped sentiment towards the currency.

Still, the size of the move against both the dollar and the euro - given the lack of significant Brexit-related news - underlined the sensitivity of sterling ahead of Brexit. With just six weeks until Britain is due to leave the bloc, May has yet to win the support of British lawmakers for her Brexit deal. Investors remain nervous about the outcome but prepared to buy sterling on any sign of a breakthrough in talks with Brussels to tweak the deal.

Economic data has assumed less importance in recent months as the scheduled Brexit departure date of March 29 approaches but wage growth data, despite coming slightly below expectations, did the pound no harm on Tuesday. Official data showed workers' pay growth held at its fastest pace in a decade, at 3.4 percent, in late 2018, slightly below a forecast for a pick-up to 3.5 percent in a Reuters poll of economists.

Despite wage growth rising, markets have pared back their expectations for Bank of England monetary policy tightening this year given the uncertainty over the sort of Brexit Britain is headed for. "The most recent data on the UK labour market continues to be strong on the whole," said David Cheetham, market analyst at online broker XTB.

Concerns about Britain's economy were underscored by Japanese carmaker Honda's announcement on Tuesday that it would be closing its UK plant, leading to the loss of 3,500 jobs. Honda said the decision was unrelated to Brexit. British opposition Labour leader Jeremy Corbyn said on Tuesday his party was keeping all options open on Brexit, including another referendum.

May has roundly rejected Labour's proposal for a permanent customs union with the EU. (Editing by Ed Osmond and Peter Graff)