Sterling hits 10-month high vs euro, takes a breather vs dollar

By Tom Wilson

LONDON (Reuters) – Sterling hit a 10-month high against the euro on Wednesday as investors bet Britain’s COVID-19 vaccinations would help its coronavirus-battered economy reopen quickly and recover from its biggest hit in 300 years.

The pound rose 0.2% against the euro to as high as 86.84 pence, its highest since April 2020. A day earlier, it had climbed to its best against the common currency since May last year.

Britain has vaccinated 15.6 million people with a first dose against COVID-19 so far, with bets that its tattered economy could reopen quickly bolstering the pound.

Expectations of large fiscal stimulus in the United States have also sent the pound to its highest in two-and-a-half years against the dollar.

Still, the pound fell 0.1% against the dollar to $1.3890. It has given up around 0.5% from the $1.3955 climbed against the greenback on Tuesday, its highest since April 2018.

“The UK’s successful vaccine rollout puts the economy in a relatively good spot,” analysts at BMO Capital Markets said in a note.

(Reporting by Tom Wilson; Editing by Gareth Jones)