Pound Reaches TwoWeek High vs Euro on BoE Cautious Optimism

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LONDON, March 9 Reuters Sterling touched a twoweek high against the euro on Tuesday and rose above 1.39, supported by progress in Britains vaccination programme, with the Bank of Englands governor cautiously optimistic about an economic recovery.

Traders expect a swift inoculation programme will help revive the economy, with more than 22 million people having had the first dose of a COVID19 vaccine in the UK.

In a speech to the Resolution Foundation, a think tank, BoE Governor Andrew Bailey painted a cautiously optimistic picture. He said he did not expect a jump in inflation, which his chief economist and some investors consider a risk.

Baileys comments are having an extended impact on the pound, with investors linking his tone with the relatively rapid vaccine rollout in the UK which continues to support expectations for the recovery, said Jane Foley, head of FX strategy at Rabobank.

The pound rose to a twoweek high against the euro at 85.51 pence on Tuesday.

Versus a weakening dollar, sterling rose 0.6 to 1.3905.

Schools in England reopened this week as part of the UKs lockdowneasing plan in a first step back towards normality.

Foley added that the improvement in a British Retail Consortium BRC survey was also marginally lifting the pound.

BRCs measure of spending at major retail chains rose by 1.0 in February compared with the same month last year, with sales of food rising over the three months to February.

Also supporting the pound was finance minister…

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