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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
(Updates prices and adds latest news)
By Olga Cotaga
LONDON, Nov 24 (Reuters) - Demand for riskier assets on
Tuesday kept sterling close to the two-month high it reached the
day before, with investors also hoping this week's Brexit talks
will result in a deal.
News on Monday that AstraZeneca's potential COVID-19 vaccine
could be up to 90% effective boosted sentiment. British Prime
Minister Boris Johnson said on Monday he hoped almost all
Britons at high risk from COVID-19 would be vaccinated by
Easter.
England will introduce a new system on Dec. 15 allowing
passengers arriving from high-risk countries to take a COVID-19
test after five days of quarantine and to be released from any
further self-isolation if they test negative.
In addition, the one-month full lockdown in England is due
to end on Dec. 2.
Still, Britain is likely to suffer some long-term economic
scarring due to the pandemic, Bank of England policymaker
Jonathan Haskel said.
Sterling was stronger in early trading, but gave back some
gains after data showed British retail sales have fallen by the
most since June during this month's lockdown across the bulk of
the country.
Month-end investment flows have curtailed gains in sterling
and the pound should be trading higher, said Marshall Gittler,
head of investment research at BDSwiss Group.
"I think the pound could continue the gains next month,
depending of course on how the Brexit talks go," he said.
The pound was last up 0.2% at $1.3352, close to
$1.3396, its highest since Sept. 2, reached on Monday. It was
earlier at $1.3380. If it were to rise above $1.3481, the surge
would propel it to nearly a one-year high.
Versus the euro, moves were more contained, with the pound
down 0.1% at 88.98 pence.
London and Brussels this week continue their negotiations
over their future trading relationship, though time is now
running very short as Britain's post-Brexit transition period
ends in fewer than six weeks.
Without an agreement, Britain would revert to trading with
the EU on World Trade Organization rules, an outcome both sides
believe would disrupt their economies.
Most investors believe a deal will be clinched, even if it
is a bare-bones one that leaves some discussions for later.
Traders were buying more put sterling options - as seen in
the one-month risk reversals levels - which usually means more
people are expecting the pound to fall than to rise in the next
few weeks. The levels are not as low as they were in
mid-September, though.
Britain's car industry body warned a failure to clinch a
Brexit deal could cost the sector 55.4 billion pounds ($74
billion) in tariffs by 2025 and undercut its ability to develop
the next generation of zero-emission vehicles.
(Reporting by Olga Cotaga, editing by Larry King and Mark
Potter)
