The British pound hit new highs, in nearly three years against the dollar and in nine months against the euro. At around 11 a.m. in Switzerland, the pound gained 0.16% against the dollar at 1.3926 dollars to the pound, after reaching a high since April 2018 at 1.3952 dollars at around 4.45 a.m. Against the euro, the British currency climbed to its highest since May 2020 at around 5:50 am to 87.06 pence per euro before erasing its gains (-0.05% to 87.29 pence).
“The weakness of the euro against the pound is mainly due to the divergence in the speed of vaccination campaigns,” said Stephen Innes, analyst at Axi.
Dollar weak on stimulus concerns
The United Kingdom, the country most bereaved in Europe by the pandemic, administered a first dose to 15 million people. Currency traders are therefore betting on a rapid recovery of the British economy, unlike the euro zone, thanks to the vaccination campaign.
“But the shift in expectations, now very favorable in the United Kingdom, somewhat underestimates the potential for recovery in the euro zone,” said Derek Halpenny, analyst at MUFG, who underlines that if the number of vaccinated does not also increase quickly, the rate of infected people begins to improve in recent weeks.
The pound also benefits from the weakness of the dollar, which lost 0.22% against the euro, to 1.2156 dollar to the euro, to one cent from its three-week low at 1.2157 dollar reached an hour more early.
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The greenback suffers in particular from the concerns of forex traders over the massive $ 1.9 trillion US economy stimulus plan planned by Joe Biden, which could cause the economy to overheat and push inflation up to levels. uncontrollable. “Now that Donald Trump’s second impeachment trial has ended, Congress will focus on the stimulus package, which could be launched in mid-March,” warned Connor Campbell, analyst at Spreadex.