* A pound gains 0.2% vs. a dollar, eliminating a loss against the euro
* Graphic: Global FX levels tmsnrt.rs/2egbfVh
* Graphic: Sterling with trade pressure from Brexit vote tmsnrt.rs/2hwV9Hv (Price update throughout)
LONDON, March 11 (Reuters) – The pound moved to $ 1.40 on Thursday, making narrow gains as the dollar weakened and investors remained focused on hopes that the COVID-19 vaccination program would bring the level Britain’s success in supporting economic recovery.
Sterling climbed as high as $ 1.3977, the highest level in a week, with analysts citing a falling dollar as the main driver. It was finally up 0.2% at $ 1.3955.
The dollar fell at its lowest level in a week against a basket of currencies after unusual data on U.S. consumer prices and a decline in Treasury yields that led some investors to bet on rapid acceleration in inflation.
It then trimmed a loss and was finally down 0.1%.
Against the euro, the pound recovered an earlier loss after the European Central Bank said it was ready to accelerate currency printing to keep up with euro zone lending costs, marking to skeptical markets that it wanted to lay the foundation for a strong economic recovery.
The euro delivered some of its gains from earlier in the session against the dollar. Compared to the pound, it was finally down 0.1% at 85.61 pence.
The pound has been among the top performing currencies so far this year, reaching $ 1.424 in February. However, the pound has fallen about 2.5% since the February 24 high.
Reasons for the gains include the UK’s progress on COVID-19 vaccines and plans to release lock-in measures, analysts said, as well as lowering expectations that the Bank of England would push interest rates below zero.
“The expectations or risks of negative rates have been completely removed – that’s important too,” said Derek Halpenny, head of EMEA research for global markets at MUFG.
Relief that an unconditional Brexit was avoided at the end of 2020 may help investors return to the UK and further support the pound, he said. (Reporting by Tom Wilson, edited by Larry King and Sonya Hepinstall)