* Graphic: Global FX rates in 2020 tmsnrt.rs/2egbfVh
* Graphic: Sterling with trade pressure from Brexit vote tmsnrt.rs/2hwV9Hv
LONDON, March 12 (Reuters) – Sterling fell against a stronger dollar on Friday as Treasury yields soared, but the pound was still on track for weekly gains amid hopes for economic recovery following a rapid vaccination program Britain.
Sterling fell 0.5% against a stronger dollar at $ 1.3925 as U.S. Treasury sold off early trading in London, pushing the yield on the benchmark note above 1.60%.
“The weakest pound is largely an act of higher yields pushing the U.S. dollar into positive territory,” said Neil Jones, head of FX sales at Mizuho Bank. “The market is looking to re-inflate the fear of inflation by buying US dollars.”
Sterling was still on track for weekly gains against the dollar, amid hopes that the relatively successful COVID-19 vaccination program in Britain would support economic recovery and strengthen the pound. .
Against a weakening euro, sterling rose 0.1% at 85.63 pence.
Data on Friday showed that the British economy traveled 2.9% in January from December, a decline that was not as severe as expected, as the country reverted to coronavirus lockout. It is likely to decrease by 4% in the first quarter of 2021, official data showed.
The data was better than the fear of a “slightly positive GBP,” ING analysts said, adding that they expected sterling to continue trading around 85.50 pence against the euro.
Sterling has gained more than 4% against the euro in 2021 and around 2% against the dollar.