LONDON: Sterling nudged lower on Monday with British Prime Minister Boris Johnson expected to confirm plans to remove nearly all remaining Covid-19 restrictions in England from July 19, despite a surge in cases to levels unseen for months.

Sterling fell 0.1% to $1.3892 against the dollar by 1450 GMT, after jumping overnight to its highest in two weeks.

Versus the single currency, it was flat at 85.43 pence.

Johnson will announce his final decision to ease lockdown measures at a news conference on Monday. He is expected to eliminate rules on mask-wearing and social contact, and the instruction to work from home.

Commerzbank analysts recalled that Johnson’s move last year not to impose lockdowns turned out to be unsustainable.

“The later the lockdowns are imposed, the stricter and probably longer they are,” said Ulrich Leuchtmann, head of FX research at Commerzbank.

“If that were to happen, the market’s optimism that the Bank of England might dare a lift-off, i.e. the first rate hike, might be shattered somewhat,” he added.

The government argues that even though cases have surged, deaths and hospitalisations remain under control.

Sterling has been among the top performing G10 currencies this year following Britain’s quick vaccination rollout, which encouraged hopes for a quick economic recovery.