LONDON: The pound strengthened against the euro and dollar on Thursday, crossing the key 0.85 level versus the euro for the first time since February 2020, while market participants were bullish that there would be further gains for the pound in the months ahead.
Sterling had its best quarter since 2015 versus the euro, gaining around 4.8%. Analysts attributed the move mostly to the UK’s rapid vaccine rollout - one of the fastest in the world - as well as relief a no-deal Brexit had been avoided.
A revised manufacturing survey showed that British factories rode a wave of orders in March and prepared for a gradual reopening of the economy from COVID-19 shutdowns by hiring staff at the fastest rate since 2014.
At 1438 GMT, the pound was up 0.2% against the dollar at $1.381.
Versus the euro, it was up around 0.1% at 85.01 pence per euro, having briefly crossed below 85 for the first time since February 2020 towards the end of the session.
“The fundamental economic data from the UK is still coming in on the strong side of expectations,” said Lee Hardman, currency analyst at MUFG. The British Chambers of Commerce said 55% of member firms expected higher turnover in 12 months ahead - the highest in a year - although immediate business conditions were well below pre-pandemic levels as the country began 2021 under lockdown.