Sterling Slips; EU and UK Fall Out over Vaccine Comments

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LONDON, March 10 Reuters The pound was little changed on Wednesday, slipping below 1.39 and edging up slightly against the euro, as currency markets calmed ahead of inflation data from the United States.

The dollar recovered some of its losses from the previous session as market participants waited for a U.S. Treasury auction and the inflation reading later in the session.

Sterling has strengthened so far in 2021, climbing as high as 1.424 in February. Analysts attribute the gains to the UKs relative success in COVID19 vaccinations, optimism about an economic recovery from the pandemic, a lessening of negative interest rate expectations and relief that a nodeal Brexit was avoided at the end of 2020.

But the gains versus the dollar have eased in recent weeks and at 1144 GMT on Wednesday, cable was down 0.2 on the day at 1.3866.

The pound continued to edge up against the euro, at 85.72 pence per euro at 1145 GMT. Eurosterling has lost more than 4 so far in 2021.

Its all about the broader risk dynamics and ultimately thats still going to be the arbiter of sterling performance today, said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets.

If we can see some degree of stabilization in terms of U.S. yields and we dont see that yield spike encouraging an additional risk selloff then I think sterling will remain reasonably wellsupported, he said.

Britain has Europes highest COVID19 death toll and has recorded its biggest economic contraction in 300 years….


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