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Sterling Edges Closer to Years High

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LONDON, May 25 Reuters Britains pound neared its high for the year on Tuesday, boosted by expectations of further relaxation of social restrictions linked to the COVID19 pandemic by the end of June.

Recent gains have seen sterling close in on a nearly threeyear high of 1.4240, a level last reached in February.

The pounds performance this year has been second only to the commoditydriven Canadian dollar among G10 currencies, buoyed by Britains fast rollout of vaccines that sparked hopes of its economy reopening.

The British currencys recent rise against the dollar has also been supported by investor concerns that rising inflation in the U.S. 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 banks interest ratesetter Silvana Tenreyro who speaks at 1600 GMT.

Bank of England Governor Andrew Bailey had said on Monday he does not see longterm implications from an expected pickup in inflation.

By 0748 GMT sterling was up 0.25 on the day against the dollar at 1.4190 and flat to the euro.

With no major economic data due on Tuesday, analysts saw the positive momentum generated by recent vaccine news as the likely main driver for the pound.

Reporting By Lawrence White. Editing by Jane Merriman

Source Reuters

 

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