Sterling Rises Past 1.42, Hits Highest vs Euro in Year

LONDON, Feb 24 Reuters Sterling jumped above 1.42 on Wednesday, coming within touching distance of 1.43, while also reaching a years high against the euro as analysts retained their bullish views on the currency.

The pound is the bestperforming G10 currency this year, up nearly 4 against the dollar and 3.2 against the euro as investors bet Britains rapid COVID19 vaccine rollout will lead to a quicker economic rebound.

Analysts also point to relief over avoiding a nodeal Brexit with the European Union at the end of last year as benefiting the pound, with the market looking through shortterm headwinds and disruption.

In Asian trading hours, sterling rose to 1.4295 against the dollar, its highest since April 2020. It climbed to its highest against the euro in a year, touching 85.40 pence.

In London trade, sterling was 0.5 higher on the day at 1.4175 and 0.3 higher to the euro at 85.82 pence by 0900 GMT.

Seemingly GBP is benefiting from a positive vaccine rollout and shortterm Brexit adjustment problems disappearing, which also from a relative rates perspective is supporting GBP, said Lars Sparresø Merklin, senior analyst at Danske Bank.

That said, momentum seems stretched and EURGBP seems oversold based on our shortterm models, and hence we may see short EURGBP take a breather from here.

Also supporting sterling has been a pushing back of market expectations of negative rates by the Bank of England. BoE Governor Andrew Bailey is due to testify before the UK…

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