Wednesday 17 February 2021 5:41 pm

Sterling climbs to 10-month high against the euro

Sterling reached a 10-month high against the euro following encouraging data fromthe UK vaccination program.

The UK has jabbed nearly 16m people in the Covid-19 vaccination rollout.

The pound rose to €1.150, surpassing yesterday’s record valuation and making it the highest since April 2020.

However it did lose ground to the US dollar today, down 0.3 per cent to 1.385

Investors believe that the UK’s speedy vaccination program will lead to a rebound in the UK ‘s economy as social distancing restrictions are gradually relaxed.

Sterling also shrugged off data that showed UK inflation rose slightly more than expected in January as the country went back into a coronavirus lockdown.

“The UK’s successful vaccine rollout puts the economy in a relatively good spot,” analysts at BMO Capital Markets said in a note.

However, some analysts have voiced caution at the rising value of the pound. Derek Hapenny, head of research fro global markets at MUFG, said: “I have been a little bit dubious trading the vaccine rollout differential in FX.  Would I be selling the euro because it’s behind on vaccine roll-outs? No.”

Expectations of large fiscal stimulus in the US also sent the pound to its highest in 2.5 years against the dollar this week.

It reached its highest against the greenback on Tuesday at $1.395.