UPDATE 1-Sterling steadies as vaccine jitters ebb

* Graphic: World FX rates in 2020 tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv (Updates prices)

LONDON, March 17 (Reuters) - Sterling steadied against both the euro and the dollar on Wednesday after Britain’s dismissal of safety concerns over the AstraZeneca vaccine saw the currency recover some ground from a tumble the previous day. Several European Union countries have suspended their rollout of the shot, developed by the University of Oxford and AstraZeneca, but Britain’s regulator has said that there is no evidence of a causal link between reports of thrombo-embolic events and the vaccine.

The safety concerns prompted a selloff in the pound on Tuesday as Britain continued to administer the vaccine.

Sterling then recovered some of those losses on Tuesday after the European Medicines Agency, echoing other health bodies, reiterated its view that there was no evidence that the vaccine was unsafe.

By 1526 GMT on Wednesday, sterling was 0.1% lower against the dollar at $1.3876. It had fallen as low as $1.3809 on Tuesday.

The pound was also 0.1% lower against the euro at 85.79 pence, not far off a year’s high of 85.40 pence per euro.

“UK authorities have dismissed safety concerns on the AstraZeneca vaccine, which should leave the pound less vulnerable than other European currencies to the suspension story,” said strategist at ING in a note to clients.

“A wait-and-see approach may prevail in GBP price action as we head to the Bank of England meeting tomorrow.”

Hopes that Britain’s rapid vaccine rollout will lead to a faster reopening of its economy and a rebound from its worst annual contraction in output in 300 years have benefited sterling this year, with the pound until recently the best performing G10 currency.

However, as a spike in U.S. bond yields lifted the dollar over the past few weeks, sterling has come well off the $1.4240 - its highest levels against the dollar in nearly 3 years which it hit on Feb. 24.

Besides optimism about a vaccine-enabled economic recovery, relief over a Brexit trade deal and the Bank of England’s pushing out of expectations of negative interest rates have also helped sterling. The BoE meets on Thursday.

Bank of England Governor Andrew Bailey said on Monday he was more optimistic about the economy, though “with a large dose of caution”.

Rabobank said in a research note that the pace of any gains for the pound “will be far slower than in the year to date”.

“We retain our medium-term forecast of EUR/GBP 0.85 but see scope for pullbacks to the 0.86-0.87 area in Q2.” (Reporting by Ritvik Carvalho; Editing by Gareth Jones)