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* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv
By Joice Alves
LONDON, March 16 (Reuters) - Sterling fell against both the
euro and the dollar on Tuesday as Germany, Italy and France
suspended AstraZeneca's COVID-19 shots amid safety
fears, dampening euphoria in Britain over its swift vaccination
push.
Sterling fell 0.6% versus the dollar to a one-week low of
$1.3817 at 0935 GMT. Against the euro, it was 0.6%
lower at 86.40 pence, touching its lowest level since March 5.
The euro zone countries said they would suspend the
AstraZeneca shots after several other European countries
reported possible serious side-effects, but the World Health
Organization said there was no proven link and people should not
panic.
The United Kingdom said it had no concerns, but analysts
have been cautious saying that if the safety fears surrounding
AstraZeneca vaccine are confirmed, this could compromise
Britain's speedy inoculation programme.
"Should the EMA (European Medicines Agency) rule that
AstraZeneca does indeed have material safety concerns, this
would potentially compromise the UK vaccine strategy, even if
the EMA no longer have any standing in the UK post Brexit," said
Jeremy Stretch, head of G10 FX Strategy at CIBC Capital Markets.
Such an outcome would risk sterling falling to around
$1.3798, Stretch said.
Sterling has gained more than 4% against the euro in the
past three months and more than 2% versus the dollar amid hopes
for a relatively fast economic recovery following a speedy
vaccination programme and declining numbers of COVID-19 cases in
Britain.
Also weighing on the pound, the European Union launched on
Monday legal action against unilateral British changes to
Northern Irish trading arrangements.
In an interview with Italian daily Il Sole 24 Ore, the
governor of the Bank of England Andrew Bailey said economic
growth in Britain will fall by 4% in the first quarter from the
same period last year and by 19% compared to the first three
months of 2019.
(Reporting by Joice Alves; editing by Emelia Sithole-Matarise)
