According to LONDON (Reuters), reported on Tuesday, sterling fell to a two-week low against the dollar amid talk of the European Union banning vaccine exports to Britain, which relies heavily on imports for its COVID-19 vaccination drive.
On Tuesday, EU leaders are due to discuss a possible ban on vaccine exports to Britain at a summit, after falling far behind post-Brexit Britain and the United States in rolling out vaccines.
On Monday, Britain demanded that the EU allow the delivery of COVID-19 vaccines it has ordered as tensions over a possible export ban on EU-manufactured shots mounted and Brussels pointed an accusing finger at drugmaker AstraZeneca.
Sterling was down 0.5% against the dollar at $1.3802, its lowest since March 9, by 0900 GMT. Against the euro, it traded flat at 86.12 pence.
Lars Sparresø Merklin, senior analyst at Danske Bank said, “one of the reasons why sterling has strengthened this year is the successful vaccine rollout but the UK relies on imported vaccines.”
“There are growing tensions between the UK and the EU, with more and more EU countries considering backing a vaccine export ban to the UK, which may delay the UK’s vaccination plan. We do not think the EU will implement an export ban (because it may turn out to hit themselves as well) but it is a topic to watch.”
In the week to March 16, speculators reduced their net long position on the pound versus the dollar, CFTC data showed. Over the past two weeks, although the market remains upbeat overall on sterling, the size of the bullish position has shrunk.
In the three months to January, Britain’s jobless rate unexpectedly fell to 5.0% when the country entered a new COVID-19 lockdown, on Tuesday, official figures showed below forecasts of a rise to 5.2% in a Reuters poll.
Today, investors will watch the speeches of three Bank of England officials – Governor Andrew Bailey, Deputy Governor Sir Jon Cunliffe and Chief Economist Andy Haldane.