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GBP/USD has plunged to levels last seen in 1985. Jane Foley, a Senior FX Strategist at Rabobank, analyzes the cable’s outlook.

Key quotes

“Without doubt, the broad based strength of the USD is a large factor behind today’s plunge in the value of the pound.” 

“It is likely that the USD will remain strong until there are signs that the coronavirus crisis has been contained.  That said, GBP has also lost ground vs. the EUR which is suggestive of intrinsic softness.”

“It is likely that GBP/USD will experience a bounce when the crisis has peaked and when USD demand relaxes.”  

“We are forecasting cable at 1.19 on a 3 month view.”