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Commenting on the GBP/USD pair’s action earlier this week, “GBP/USD dropped to its lowest levels since November as the pound failed to hold its own against a wave of USD strength,” Rabobank analysts said.

Key quotes

” It is our view that in the absence of a marked improvement in the news regarding coronavirus that the USD will retain its broad-based strength. That said, the outlook for GBP could reach various inflexion points this year which could spark sharp movements in the currency in either direction.”

“It remains our central view that GBP/USD will struggle to regain a strong footing above the psychologically important 1.30 level on both a 1 and 3 month view as the EU/UK future relationship talks progress.”

“While the debate about the economic outlook in the UK has heated up in the past couple of months, we suspect that politics will remain the primary driver of the pound in the coming months.”