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Pound hits 3-year high against dollar amid vaccine rollout optimism

LaToya Harding
·Contributor
·2-min read
Despite rising cases of coronavirus infections and the spread of a new 'more deadly' variant, traders were optimistic about the UK’s vaccine rollout. Photo: Jason Cairnduff/Reuters
Despite rising cases of coronavirus infections and the spread of a new 'more deadly' variant, traders were optimistic about the UK’s vaccine rollout. Photo: Jason Cairnduff/Reuters

The pound reached a fresh three-year high against the dollar (GBPUSD=X) on Wednesday before retreating slightly, touching at $1.3758, its strongest level level since May 2018.

It has since fallen 0.25% against the dollar in afternoon trade, at $1.3700. However, it is 0.19% up against the euro (GBPEUR=X) at €1.1317, an eight and a half month peak.

Despite rising cases of coronavirus infections and the spread of a new “more deadly” variant, traders seem fairly optimistic about the UK’s vaccine rollout.

Michael Brown, currency expert at Caxton FX, said that sterling has traded well over the last 24 hours.

“Markets grew increasingly optimistic about the UK’s vaccine rollout, and increasingly pessimistic about the parlous state of the pandemic across the Channel.

"The European Central Bank (ECB) jawboning, in the form of a new study into the euro exchange rate, also does little to help the common currency.”

More than 100,000 people in the UK have now died from COVID-19, with the UK recording some 1,631 deaths within 28 days of a positive test on Tuesday.

Britain was the first European nation to pass the 100,000 landmark and the fifth country in the world after the US, Brazil, India and Mexico.

UK prime minister Boris Johnson said: “We truly did everything we could. I'm deeply sorry for every life lost.”

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The UK has been among the leaders in getting people inoculated relatively swiftly, ramping up its own vaccination programme in the country.

Pound/dollar five-day chart. Source: Yahoo Finance
Pound/dollar five-day chart. Source: Yahoo Finance

Britain is currently leading the continent’s vaccination race, after becoming the first country to approve the Pfizer jab.

Around 2.4 million people have been vaccinated so far in the UK, with around 40% of over-80s receiving the jab and 23% of elderly residents in care homes.

Seven mass vaccine centres have now opened in England as the government aims to offer vaccinations to about 15 million people in the UK by mid-February.

Ashton Gate football stadium in Bristol, Epsom racecourse in Surrey, the Excel Centre where London's Nightingale hospital is based, Newcastle's Centre for Life, the Manchester Tennis and Football Centre, Robertson House in Stevenage and Birmingham's Millennium Point will offer vaccines to people aged 80 and older, along with health and care staff.

As part of the vaccines delivery plan, the government also hopes that all adults can be vaccinated by the autumn. It plans to have 2,700 vaccine sites across the country.

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