The pound plunged 5% to its lowest level against the dollar in over three decades as the shocks caused by the coronavirus rippled through global markets.
Investors fled from UK assets as the pandemic began spreading through Britain, with many fearing Prime Minister Boris Johnson’s response has fallen short compared to measures taken by other European nations.
Sterling has also suffered due to heightened global demand for the greenback, with a gauge of dollar strength up for a seventh session.
Sterling fell as much as 5% to $1.1453, surpassing even the lows it recorded in the aftermath of the 2016 Brexit vote. It was last lower in 1985, when the world’s richest nations signed the Plaza Accord to weaken the dollar and haul the U.S. economy out of a recession.
“We have never seen the pound trade like this apart from Brexit,” said the analysts, adding how the coronavirus impact on the British economy is still not fully being felt. “Here we are in a complete different ball game with the market completely uncertain how deep the hit to growth will be and how long it will last.”
