LONDON: Sterling slipped on Tuesday and was on track for its worst day against the euro in five weeks as investors took some cash off the table, while continuing to bet on a speedy re-opening of the British economy.
Expectations of a UK economic rebound, spurred by a rapid COVID-19 vaccination programme, have just helped sterling to record its best quarter since 2015 versus the single currency.
But as traders returned from the long Easter weekend, the pound fell as much as 0.7% to 85.51 pence versus the euro at 1440 GMT, putting it on track for its worst session since Feb. 25.
Sterling also fell 0.5% against the dollar to $1.3844, after earlier touching $1.3919, its highest since March 19.
“It is the re-opening of London this morning that is seeing sterling under some initial pressure, as sellers have returned and taken advantage of the rally seen over the last 24 hours or so,” said Stuart Cole, chief macro strategist at Equiti Capital in London.
On Monday, the pound recorded its best day against a weakening dollar since Feb. 18, as US Treasury yields held below recent highs.