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Sterling rises vs euro; speculators' long position hits three-year high

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·2 min read
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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

LONDON, March 8 (Reuters) - The pound slipped against a strong dollar on Monday, but strengthened against the euro, as the UK's relative success in COVID-19 vaccinations supported the British currency and data showed speculators were the most bullish in three years.

Although Britain has Europe's biggest coronavirus death toll, it has outperformed on the vaccine front, with more than 21 million people having received the first dose of a COVID-19 vaccine.

In the first step towards a return to normality, schools in England reopened on Monday as part of the UK's lockdown-easing plan.

At 0901 GMT, the pound was down 0.1% against a stronger dollar, at $1.3819.

Versus the euro, it was up around 0.2%, at 85.930 pence per euro. The euro has lost around 3.8% against the pound this year.

Speculators added to their net "long" position on the pound and are the most bullish in three years, according to CFTC futures data for the week to March 2.

Chancellor Rishi Sunak laid out his budget plan last week, which included a further extension of pandemic stimulus packages and a corporate tax hike from 2023.

"Last week’s Budget supports our view that the UK economy is well-positioned for the coming recovery," wrote Goldman Sachs analysts in a note to clients.

JP Morgan analysts wrote in a note on Friday, however, that they sold the pound because they perceived it as riskier than market expectations.

"We expect GBP to remain vulnerable to the ongoing re-pricing in US yields and less bullish risk backdrop," they wrote.

Since Britain left the EU last year, relations between the two have soured, with each side accusing the other of acting in bad faith in relation to part of their trade agreement that covers goods movements to Northern Ireland.

British Prime Minister Boris Johnson said on Sunday his government would iron out what he described "technical issues" with the European Union over post-Brexit trade.

The UK lost market share in its biggest export markets during the COVID-19 pandemic, due to global trade chaos, Brexit and poor productivity, research published on Monday showed. (Reporting by Elizabeth Howcroft, editing by Ed Osmond)