The British pound is trading at historic lows at its lowest levels in more than three decades as people worldwide adjust to once-in-a-generation measures to battle the COVID crisis.
Concerns about the economic impact of the coronavirus overshadowed any stimulus efforts by policymakers so far. Governments took increasingly drastic measures to try to reduce the severity of the global outbreak.
While the British currency has been under selling pressure since last week after it hit a two-month high above $1.31, the selloff accelerated on Wednesday. Traders dumped positions across the board.
Against the dollar, the pound dived at its lowest levels since the October 2016 flash crash, 1.7% to $1.1852. Barring the low of $1.1491 hit then, the pound is trading at its lowest level since March 1985.
Traders shrugged aside news that Britain would launch a 330 billion-pound ($399 billion) lifeline of loan guarantees. The UK will provide a further 20 billion pounds in tax cuts, grants and other help for businesses facing the risk of collapse.
Against the euro, the British currency weakened 1.13% to 92.21 pence.
Signs of stress were everywhere as global central banks resumed their efforts to keep money markets functioning normally.
Automakers are halting production at plants across Europe as they grapple with the coronavirus pandemic and diving demand.
START TRADINGForex – Pound at its lowest levels since 1985
Companies and investors worried by the coronavirus outbreak rushed to the safe haven of the world’s most liquid currency, the US dollar. Only perceived safe-haven currencies managed to hold their ground against a strengthening greenback.
Some traditional safe-haven assets such as gold were also under pressure as battered investors looked to unwind their damaged positions.
The U.S. dollar surged to a three-year high against major currencies on Wednesday. The greenback hit its highest level since April 2017, breaking 100 against a basket of currencies.
The dollar index against a basket of currencies stood at 99.699, up 0.12% on the day.
The safe-haven yen was up around a third of a percent to 107.30 yen while the Swiss franc edged up 0.1% to $0.96055 francs.
The Australian dollar sunk to a fresh 17-year low of $0.59110 on Wednesday.
The New Zealand dollar hit a decade low of $0.5841 cents.
Oil prices fell for a third session with U.S. crude futures tumbling to a 17-year low.
U.S. crude was down 84 cents, or 3.12%, at $26.11 a barrel by 0822 GMT, having earlier fallen to $25.83 a barrel, the lowest since May 2003.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money