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Sterling falls to lowest level in 35 years except for 2016 ‘flash crash’ as dollar strengthens

By Ramla Soni

The pound hit $1.1826, its lowest point since 1985, with the exception of an overnight 'flash crash' in October 2016

The dollar surged to a three-year high against major currencies whilst the pound fell to a six-month low against the dollar and weakened against the euro as investors focused on the economic impact of the coronavirus.

Against the US dollar sterling fell 1.9 per cent, falling below $1.19 to its lowest level since October 2016, while against the euro it weakened 0.4 per cent to 91.70 pence.

The pound hit $1.1826, its lowest point since 1985, with the exception of an overnight “flash crash” in October 2016 which took sterling to $1.1450.

The dollar hit its highest level since April 2017, breaking 100 against several currencies. The index has gained more than 5 per cent in a little over a week and on a seven-day rolling basis had seen its biggest rise since the 2008 global financial crisis.

The Australian dollar and the New Zealand dollar also fell against the greenback whilst the Norwegian crown hit a fresh record low of $10.6356. The Australian dollar sunk to a fresh 17-year low of $0.59110, while the New Zealand dollar hit a decade low of $0.5841 cents.

The European Central Bank, the Bank of England and the Swiss National Bank all held dollar liquidity sales as part of the biggest co-ordinated funding injection by central banks since the 2007-09 financial crisis.

Only perceived safe-haven currencies remained strong against a strengthening greenback, with the yen up around a third of a per cent to 107.30 yen while the Swiss franc rose 0.1 per cent to $0.96055 francs.

FURTHER READING: Gold prices plunge amid Covid-19 crisis

FURTHER READING: US stocks fall 12 per cent – the worst drop since 1987 crash

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