The British pound dived on Wednesday to its lowest level against the US dollar since 1985 and to a more than decade-low against the euro as coronavirus fears and high demand for dollars overshadowed stimulus efforts. Sterling has come under fierce selling pressure after hitting a two-month high above $1.31 last week, but the selloff accelerated on Wednesday as traders shed Sterling positions across the board to obtain dollars.

Against the dollar, the pound plunged as much as 5%, falling past the $1.1491 level hit during the October 2016 “flash crash”. That was previously the lowest since 1985. It then inched off those lows to finish down 3.6% on the day. Against the euro, the pound fell as low as 3.5%, its lowest level since March 2009.

Analysts believe the pound is in a challenging situation as it is being perceived as an unnecessary risk in a portfolio, even if some investors had previously been positive about the Brexit negotiation outcome.

GBPUSD opened at 1.2031 and fell sharply across the day, closing at a low of 1.1551

GBPEUR opened at 1.0969 and performed similarly, closing at a low of 1.0685 and dropping further to an evening low of 1.0566

While long positions in the pound have reduced, they remain near their highest levels in two years, according to the latest positioning data. The euro rose against the dollar and the pound on Thursday after the European Central Bank announced a 750 billion euro asset-purchase programme in response to the coronavirus outbreak.

The ECB said the new programme, which targets public and private sector assets, will be in place until the end of 2020. The ECB’s announcement mirrors a series of steps by major central banks this week to mitigate the impact of the coronavirus outbreak on the global economy. Analysts say the euro’s gains could be only temporary because many investors are selling as much as they can to keep their money in dollars due to the high levels of uncertainty.

The euro rose 0.37% against the dollar in Asia on Thursday and was up 0.22% against the Swiss franc and 0.56% against the Japanese yen.

EURUSD opened at 1.0968 and fell steadily across the day to close at a low of 1.0810

The New Zealand dollar fell to an 11-year low of $0.5696 early in Asian trading. The Australian dollar jumped 0.5% $0.5794 from a 17-year low reached on Wednesday as the Reserve Bank of Australia pumped a record $12.7 billion into the banking system on Thursday.

Against the yen, the US dollar rose 0.2%.