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LONDON, Feb 15 (Reuters) - The British pound climbed above $1.39 on Monday for the first time in nearly three years, lifted by broad-based dollar weakness as well as by hopes for the end of a third national lockdown.
The currency has made gains against a struggling greenback this month, as the aggressive rollout of the COVID-19 vaccination programme in the United Kingdom raised expectations its economy will be able to recover more swiftly than those of its European peers.
British Prime Minister Boris Johnson will judge this week how fast England can exit its COVID-19 lockdown, after vaccinating 15.300 million people with a first dose.
With the fastest rollout per capita of any large country, Britain expects its weekly vaccine supply to increase over time, Health Secretary Matt Hancock said.
“GBP continues to reap the dividends of a successful vaccine rollout and momentum is building towards a re-opening of the economy – probably starting with schools on March 8,” Chris Turner, global head of markets at ING, said.
Britain’s Brexit deal with the European Union has also relieved the pressure on the currency.
The reopening of the economy following the post Brexit re-rating could support sterling towards $1.40, ING told clients in a note.
The pound hit its highest level since late April 2018 on Monday and was trading 0.4% higher at $1.3912 at 1621 GMT.
Versus the euro, it rose 0.3% at 87.22 pence, after hitting a nine-month high of 87.40 pence in earlier trading.
England, which is home to about 85% of the UK population, launched a hotel quarantine system on Monday, demanding that passengers arriving there from any of 33 “red list” countries spend 14 days in a hotel room, under new border restrictions designed to stop variants of the coronavirus.
Adding to the upbeat mood, asking prices for homes in Britain unexpectedly rose in January and early February, a survey from property website Rightmove showed.
Reporting by Saikat Chatterjee; Editing by Sujata Rao, Gareth Jones and Barbara Lewis
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