(Bloomberg) — The pound rallied to a three-year high as traders bet the U.K.’s economic recovery will gain traction with the rollout of coronavirus vaccines.
Sterling gained as much as 0.3% to $1.4248, breaching a February peak to reach the strongest since April 2018. Three-fourths of the U.K. population will be covered with a two-dose vaccine in one month should the current pace of inoculations continue, according to data collected by Bloomberg News and Johns Hopkins University.
Read: U.K. Economic Optimism Hits Highest Since 2016 as Lockdown Eases
“The pound is favored because the progress of vaccination puts the U.K. closer to an economic normalization than other countries,” said Toshiya Yamauchi, chief manager for foreign-exchange margin trading at Ueda Harlow Ltd. in Tokyo. “Sterling could climb toward $1.45.”
Cable’s ascent reflects the U.K.’s relative success in containing the pandemic, with the authorities planning to fully reopen the economy on June 21. While the discovery of a highly transmissible variant of the virus originating from India poses a risk, Prime Minister Boris Johnson said there is no conclusive reason to delay the easing of the lockdown.
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