(Bloomberg) — Sterling’s vaccine-fueled rally against the euro is beginning to look relentless.
The pound extended its longest winning streak in five-and-a-half years after the Telegraph reported the U.K.’s exit from lockdown could be accelerated if data on the effect of vaccines proves better than expected. The euro fell as much as 0.8% to 85.41 pence, dropping for a ninth straight day, on optimism that Britain will bounce back faster than its European peers.
The U.K. has administered more than 27 doses per 100 people, according to Bloomberg’s tracker. That far outpaces the six doses for the EU and has helped turn the pound into the best performing Group-of-10 currency against the euro this year. BofA Global Research this month revised their year-end target for the euro-pound pair to 0.88, from 0.94 previously. Dankse Bank sees the cross trading at 0.85 in the second half of the year.
“The main driver is building confidence that the U.K.’s world-leading vaccine roll-out will allow the U.K. economy to re-open more quickly than the rest of Europe,” said Lee Hardman, a foreign-exchange strategist at MUFG Bank. “I would say the case for the pound to continue to outperform in the near-term remains compelling.”
Yet Brussels could be closing the gap. The EU may be able to vaccinate 75% of its adult population by the end of August, about two months earlier than previously forecast, according to London-based research firm Airfinity Ltd.
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