More than 22 million people have had the first dose of a COVID-19 vaccine in the UK. Traders expect the swift inoculation programme will help the economy rebound from its biggest contraction in 300 years.
In early London trading, the pound rose to a two-week high against the euro at 85.57 pence. It was flat at 85.76 pence at 1227 GMT.
"Sterling is benefiting mostly from the vaccine race - it's really the main differentiator," said Ned Rumpeltin, head of European currency strategy at TD Securities.
The pound was down around 0.4% against a stronger dollar at $1.3686.
In this environment, everything is pointing towards refuge in the dollar, even if the moves are marginal in today's trading session.
The pound is not sheltered from this strong USD environment, despite the UK's aggressive rate of vaccine distribution, although it remains relatively robust against other G10 peers.