Thursday 21 January 2021 1:59 pm

Pound sterling at highest point against the US dollar in 2.5 years

Pound sterling is holding on to gains that pushed it to its highest price against the US dollar in more than two years.

The pound is steady this afternoon against the greenback, at $1.373, a 0.55 per cent gain on the day.

Sterling earlier hit at an eight-month high against the euro, but pared gains to settle at1.128.

Read more: Wall Street hits record heights as Biden presidency lifts stimulus hopes

Some City analysts have attributed the higher pound to a relatively swift Covid-19 vaccine rollout, which could reduce the severity and length of the predicted recession.

Yesterday, Bank of England governor Andrew Bailey said he expected the UK economy would rebound strongly as the country moves ahead with vaccinating the population.

“If you look at the current status of the vaccination process, the UK is leading here in Europe and it’s also still vaccinating at a faster pace than in most of the big EU countries,” said Mikael Milhøj, senior analyst at Danske Bank.

“Also, you can see that the support for getting vaccinated in the UK is much higher than in Germany, Italy, Spain and especially of course in France. And that means that the UK economy may exit this Covid-19 crisis before the rest of Europe does and that I believe should have a positive impact on sterling.”

Read more: London’s new ‘postcode lottery’: Councils fail to pay event firms lockdown grants

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