* Graphic: Global FX rates in 2020 tmsnrt.rs/2egbfVh
* Graphic: Sterling with trade pressure from Brexit vote tmsnrt.rs/2hwV9Hv (Prices updated, comment)
LONDON, February 1 (Reuters) – The British pound rose to its highest level against the euro since May 2020 and came close to recent three-year highs against the dollar, fueled by a mix of risk aversion. higher global and optimistic across the UK. COVID-19 vaccine distribution.
More risky currencies were earned against the dollar, which was declining as global market sentiment was picked up by the accumulation of equities in the Asian and early European sessions.
Following a row between Britain and the European Union over vaccine procurement, EU officials said on Saturday that it was a mistake to call Northern Ireland’s Brexit emergency powers.
The UK said it expected its supply of COVID-19 images would not be suspended. Official data on Sunday showed that nearly 9 million people in the UK received their first dose of vaccine.
Michael Hewson, chief market analyst at CMC Markets UK, said the pound was benefiting from vaccine advances.
“The economy that does the best is the economy that can get the vaccine the earliest, and at the same time that is similar to the UK,” he said.
With the impact of Brexit already priced, Hewson believes the pound, if it goes through $ 1.3760, will reach $ 1.40 in the first half of this year, probably by the end of March.
In early trading in London, the pound rose to $ 1.3758 – just shy of the three – year high of $ 1.3759 which it reached on Wednesday last week. By 1215 GMT it was at $ 1.3721, up 0.2% on the day.
Against the euro the pound rose about 0.6% at 88.09 pence after touching its strongest since May 2020.
Market participants will focus on a Bank of England meeting on Thursday, where the bank expects to publish the results of a consultation on what negative rates would mean for the banks ’work.
Lee Hardman, money analyst at MUFG, said in a note to clients that the argument for another monetary policy favor is soon fueled by the last-minute Brexit trade deal, the stability of the UK economy at end of last year and the relatively rapid roll-out of vaccines in the UK.
“However, the third harsher lock-in is expected to hit growth more negatively at the beginning of this year,” he said.
Most economists surveyed by Reuters believe the Bank of England is unlikely to cut rates below zero this year.
CFTC futures data showed that the long net position on the pound moved in the week to January 26, although speculators remained bullish on the overall currency.
Reporting by Elizabeth Howcroft Editing by Jan Harvey and David Goodman