LONDON, March 15 Reuters Sterling held above 1.39 on Monday after falling more than 1 cent versus the dollar on Friday as hopes for an economic recovery in Britain outweighed the impact of higher U.S. Treasury yields.

The pound was down 0.25 at 1.3935 at 0954 GMT, after falling almost 1 during Fridays session to 1.3865.

A sell off in Treasuries, which has pushed the yield on the benchmark note above 1.60 and strengthened the dollar, has added pressure on risk currencies like the pound.

But amid hopes for a relatively fast economic recovery following a speedy coronavirus vaccination programme and declining numbers of cases in Britain, the outlook for sterling remained positive, analysts said.

Sterlings price action this morning is predominantly a retracement of Fridays losses, said Simon Harvey, Senior FX Market Analyst at Monex Europe.

The pound is unlikely to widely disconnect from the 1.40 handle without a major shift from the Bank of England or a hiccup occurring with the governments plans to reopen.

BoE Governor Andrew Bailey said on Monday he was now more positive about the British economy as the novel coronavirus was in retreat though he cautioned the COVID19 effect was huge.

Britain has suffered Europes highest COVID19 death toll, but is now rolling out vaccines faster than other European countries and the government hopes to fully lift socialdistancing restrictions by late June.

Versus the euro, sterling rose 0.3 to 85.60 pence, after falling to 85.98…