LONDON: Sterling strengthened on Monday as global risk appetite rose on news of progress in Pfizer's Covid-19 vaccine trials, as well as Democrat Joe Biden's US election win, but ongoing Brexit negotiations still weighed on the UK currency.

Global equities have risen as investors turned optimistic that a Biden presidency would result in a bigger fiscal stimulus package for the United States and calmer global trade.

Market sentiment got a further boost on Monday when Pfizer Inc said that its experimental Covid-19 vaccine was more than 90% effective.

Along with other risk assets, the pound was lifted by the news, gaining around 0.5% versus the dollar in the 10 minutes after the announcement.

Ned Rumpeltin, European head of currency strategy at TD Securities, said the pound was trading along with the broader market.

"Clearly, the big news is, of course, pricing in the Biden presidency, which I think is more about pricing out risk premia than pricing Biden in," he said, adding that a lot of the market-positive news had already been priced in.

"The Pfizer news is a good thing for the world in general. If the vaccine is as safe and effective as these headlines might suggest, that might be another game-changer," he added.

At 1554 GMT the pound was at $1.3134, down around 0.1% on the day versus a strong dollar. Versus the euro it was up around 0.4%, at 89.98 pence.

Deutsche Bank strategists wrote in a note to clients that sterling would be a major beneficiary of a vaccine "not only because the UK government has good exposure to Pfizer in its broad and deep vaccine portfolio, but also because the UK has perhaps struggled the most with managing the pandemic without a vaccine."

"In other words, a vaccine could make the biggest difference to the economic outlook in the UK, relative to its peers in G10," they said. Investors remained focused on Brexit negotiations as a new round started in London on Monday.