GBP/USD: At the mercy of the market risk sentiment

GBP/USD witnessed some aggressive selling on Wednesday and nosedived to 1985 lows as the global rush to hoard cash provided a strong boost to the USD and exerted some heavy pressure, Haresh Menghani from FXStreet reports.

Key quotes

“The rush to hoard cash was further evident from a selloff in the US Treasuries, which lifted the yields sharply higher and provided a strong boost to the USD’s status as the global reserve currency.”

“The British pound failed to gain any respite from the UK government’s £330 billion stimulus package announced on Tuesday, rather continued to be weighed down by Britain’s late move to discourage mass gathering and controversial measures on combating the coronavirus pandemic.”

“The brutal selloff across the global equity markets remained unabated, which continued underpinning the greenback’s perceived safe-haven demand and exerted some fresh pressure around the major.”