Sterling gives up 3-year peak on profit-taking

Sterling fell in European trade away from three-year peak against dollar on track for the first loss in four days on profit taking, while losses were curbed by strong UK inflation data for January.

GBP/USD fell 0.3% to 1.3861, with an intraday high at 1.3907, after closing up 0.1% yesterday for the third straight session, marking three-year highs at 1.3951. 

The pound was bolstered by hopes of quick economic recovery in the UK after vaccinating over 15 million people so far from Covid 19.

The dollar index rose over 0.3% away from three-week lows at 90.11 after 10-year US treasury yields hit year highs at 1.331. 

The yield spike came as inflation expectations rose to six-year highs as energy prices continue to rise, while the government launches massive financial and relief packages to bolster the economy. 

In Britain, consumer prices rose 0.7% in January, the best pace since October, beating estimates of 0.6%.