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Sterling Slips after Reaching Two-Week High Versus Dollar

LONDON, April 6 (Reuters) - Sterling slipped on Tuesday as investors took some cash off the table after cable jumped to its highest point in more than two weeks as traders continued to bet on a speedy re-opening of the British economy.

Versus the dollar, sterling was 0.4% lower at $1.3854 at 0859 GMT, after earlier touching $1.3919, its highest since March 19.

Bets on a speedy economic recovery, spurred by a faster COVID-19 vaccination programme than the euro zone’s, have supported sterling over the past few months.

Sterling had its best quarter since 2015 versus the euro, gaining around 4.8%.

But as traders returned from a long weekend in Europe, sterling was 0.4% lower versus the euro at 85.27 pence.

“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.

Cole added that the selling appeared to be a mixture of profit-taking and new short positions being initiated.

Market participants continued to expect further gains for the pound in the months ahead.

With the vaccine programme rolling out rapidly across the UK and infection numbers falling, British Prime Minister Boris Johnson confirmed on Monday a planned re-opening of the economy would take place next week.

Shops, gyms, hairdressers and outdoor hospitality areas in England will re-open. The government was also looking at a COVID-status certification system, or vaccine passport, to help re-open larger events.

Britain will begin the rollout of Moderna’s COVID-19 vaccine in mid-April, vaccine deployment minister Nadhim Zahawi said on Tuesday, adding the inoculation programme was on track to meet government targets.

Some 12 million second doses are planned to be distributed in April.

PM Johnson also said on Monday his government hoped that non-essential international travel would resume from May 17, but did not want to underestimate the growing number of COVID-19 cases elsewhere.

Editing by Larry King

Source: Reuters

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