LONDON: The pound edged towards $1.40 on Thursday, making slim gains as the dollar weakened and investors remained focused on hopes that Britain’s relatively successful COVID-19 vaccine programme would support its economic recovery.
Sterling climbed as high as $1.3977, its highest in a week, with analysts citing a falling dollar as the chief driver. It was last up 0.2% at $1.3955. The dollar fell to its lowest in a week versus a basket of currencies after benign data on US consumer prices and a decline in Treasury yields led some investors to trim bets on a rapid acceleration in inflation.
It later trimmed losses and was last down 0.1%.
Against the euro, the pound recovered earlier losses after the European Central Bank said it was ready to accelerate money-printing to keep a lid on euro zone borrowing costs, signalling to sceptical markets it was determined to lay the foundation for a solid economic recovery. The euro gave up some of its gains from earlier in the session against the dollar. Versus the pound, it was last down 0.1% at 85.61 pence. The pound has been among the best-performing major currencies so far this year, reaching $1.424 in February. Still, the pound has slipped around 2.5% since its Feb. 24 high.
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