LONDON, March 30 Reuters The pound strengthened against a weaker euro on Tuesday, but was flat against the dollar, as investors focused on the outlook for reopening the UK economy from its lockdown.

Sterling has gained some 4.5 against the euro so far this year. Analysts say the move is largely due to the pace of the UKs vaccine rollout, which is one of the fastest in the world and aims to offer shots to all adults by the end of July.

Some lockdown restrictions in England ended on Monday, in contrast to much of Europe, where France and Germany are among the countries contending with a third wave of COVID19 infections and hospitalisations.

With diverging paths on the vaccination side in the UK and the EU, EURGBP may continue to drift lower towards the key 0.85000 support this week, wrote ING strategists in a note.

But Commerzbank strategist YouNa ParkHeger struck a more cautious note, writing to clients that even if the UK emerges more quickly from the corona crisis than for example the EU a large share of the positive news is likely to be priced in already.

She said that risks relating to the economic recovery, including the collapse of British exports to the European Union following Brexit, mean that the Bank of England might continue to maintain its expansionary monetary policy for a long time.

Even though Sterling is going to be able to benefit from the projected end of the pandemic shortterm, mediumterm we remain sceptical about Sterling, she said.

At 1030…