Pound sterling jumped today as some Covid-19 lockdown measures were eased across England, recovering some of the pound’s losses last week, but analysts cautioned that the boost to sterling from being ahead in the vaccine race could be short-lived as other countries catch up.
Shoppers headed to the high street as England’s shops, pubs, gyms and hairdressers reopened after three months closed.
This lunchtime, the GBP was buying was €1.155, up 0.35 per cent on the day but still weaker than when it hit a one-year high this time last week.
Against the dollar, the pound was up around 0.41 per cent at $1.37.
“We’ve known about 12 April for some time but there were some doubts, I think, in investors’ minds as to whether the UK would actually open for business today, and it does appear that retail is up and running, so I think that’s generated some sterling demand today,” said Neil Jones, head of FX sales at Mizuho.
But, he said, the so-called “vaccine trade” would not last, as other countries catch up to the UK in terms of the easing of lockdowns over the longer term.
The UK’s vaccine rollout – one of the fastest in the world – helped the pound have its best quarter since 2015 in the first three months of 2021.
That trend reversed last week, with sterling suffering a net 2.1 per cent weekly loss against the euro – a move which market participants said was amplified by a squeeze of euro-pound short positions.