LONDON, May 25 — Britain’s pound neared its high for the year today, boosted by expectations of further relaxation of social restrictions linked to the Covid-19 pandemic by the end of June.
Recent gains have seen sterling close in on a nearly three-year high of US$1.4240, a level last reached in February.
The pound’s performance this year has been second only to the commodity-driven Canadian dollar among G10 currencies, buoyed by Britain’s fast rollout of vaccines that sparked hopes of its economy reopening.
The British currency’s recent rise against the dollar has also been supported by investor concerns that rising inflation in the US could prompt interest rate increases.
British policymakers on Monday had adopted a relaxed tone about inflation, helping the pound to hold on to recent gains and setting expectations of a similar tone from the central bank’s interest rate-setter Silvana Tenreyro who speaks at 1600 GMT.
Bank of England Governor Andrew Bailey had said on Monday he does not see long-term implications from an expected pick-up in inflation.
By 0748 GMT sterling was up 0.25 per cent on the day against the dollar at US$1.4190 and flat to the euro.
With no major economic data due today, analysts saw the positive momentum generated by recent vaccine news as the likely main driver for the pound. — Reuters
