By Joice Alves
LONDON (Reuters) -The pound edged higher against the dollar and steadied around $1.41 on Wednesday as investors weighed the possibility that a COVID variant, first found in India, could delay the final phase of reopening in Britain on June 21.
After touching a three-year high of $1.4250 versus the dollar this week, sterling fell to $1.4113 in earlier trade. It reversed course to edge 0.2% higher at $1.4166 at 1505 GMT.
Versus the euro, the pound was also 0.2% higher at 86.14 pence.
Sterling is a top-performing G10 currency this year and has benefited from positive global investor sentiment towards the UK following Britain's speedy vaccination programme.
Britain recorded no new deaths within 28 days of a positive COVID-19 test on Tuesday for the first time since March 2020. The figure comes after a national holiday, a factor that has in the past skewed the data.
But British Prime Minister Boris Johnson said on Wednesday he would be cautious in lifting further restrictions in June as scientists needed more time for data on the impact of the vaccine on the Delta variant.
"Concerns about the spread of the Indian COVID variant and the risks to the 21st June full reopening plans have yet again weighed on GBP," said Petr Krpata, Chief EMEA FX and IR strategist at ING.
Nomura analysts wrote that delays could be an opportunity as the date is largely symbolic since most of the reopenings have already occurred.
"If it is delayed we would expect GBP to sell off, but only briefly and provide an opportunity to add to longs."
Data showed that British retailers have reported the smallest price falls since the start of the COVID-19 pandemic as lockdowns eased, and price pressures look set to rise further in 2021.
Last week, sterling had found support in comments from Bank of England policymaker Gertjan Vlieghe.
The BoE is likely to raise rates only well into next year, Vlieghe said, while noting an increase could come earlier in 2022 if the economy rebounded more quickly than expected.