GBP/USD surges past $1.24 as US dollar suffers worst week since 2009

The US dollar plummeted at the end of last week’s session as the USD sell-off continue to build steam.

Meanwhile, the pound opens this week on the defensive, with GBP/EUR sliding to €1.1178 and GBP/USD falling to $1.2352. GBP/CAD is muted at C$1.7384, while GBP/AUD and GBP/NZD are holding steady at AU$2.0159 and NZ$2.0561 respectively.

Coming up this week we can expect the coronavirus crisis to stir further volatility in the currency market as it continues dominating headlines.

What’s been happening?

The US dollar took another beating on Friday, leading the ‘Greenback’ to suffer its worst week of trade in over a decade.

Friday’s slump appeared driven by easing concerns over USD liquidity, as well as a slump in US treasury yields, and came despite the US House of Representatives finally approving a massive $2.2 trillion stimulus package.

This plunge in the US dollar appeared to mostly benefit the pound, which continued to recoup its losses from the previous week.

However, Sterling’s gains were capped somewhat by Friday afternoon as Boris Johnson became the first world leader to acknowledge a positive diagnosis for the coronavirus.

Meanwhile, the euro struggled to find support at the end of last week after Italy reported a spike in both new coronavirus cases and deaths, stifling hopes the situation in Europe’s worst hit country was improving. 

What’s coming up?

Looking to the week ahead, it’s safe to assume that the coronavirus crisis will continue dictating market sentiment.

This may see the USD sell-off carry over into this week, as efforts by the Federal Reserve and other central banks to free up their cash reserves continue to quells fears of a potential USD shortage.

Also in focus for USD investors will be the highly influential non-farm payrolls report later in the week, which is expected to confirm a dramatic plunge in employment growth in March.

In Europe the spotlight will be on the Eurozone’s latest economic sentiment survey, where the concerns surrounding coronavirus are expected to have prompted a much gloomier outlook from economists.

Finally, in the UK GBP investors will be watching the government on the expectation it may introduce stricter measures to contain coronavirus after Boris Johnson warned things will get worse before they get better.