Record High in UK FTSE After BOE Rate Cut, GBP Bounces Too
The GBP and UK FTSE 100 have turned higher after the BOE rate cut, and they also left the door open for further cuts, pushing FTSE to a new record high.
The Bank of England (BoE) had been widely expected to cut interest rates by 25 basis points and they met the expectations, reducing interest rates by 0.25%. The FTSE 100 made a strong bullish reversal yesterday and today, buyers continued to push the price higher, breaking last week’s high of 8,697 points. Although, other major indices are also quite bullish as well.
GBP/USD Chart Daily – The 50 SMA Was Broken This Week
This week, the USD pulled back as market sentiment improved following Donald Trump’s decision to postpone trade tariffs, leading to a short-lived bounce in GBP/USD . However, the pair has been in a steady downtrend since late September 2024, shedding over 13 cents in that period.
Adding further pressure, the Federal Reserve’s hawkish rate cut signaled a slower pace of monetary easing in 2025, pushing GBP/USD down to 1.21. Unless there is a shift in BoE policy or a significant weakening of the US Dollar, the pair may struggle to find a sustained upside, which sent GBP/USD above the 50 Daily SMA (yellow).
The FTSE 100 UK index was trading in a range for most of 2024, however moving averages were keeping the price supported on the daily chart. In January 2025 though, we saw a bullish breakout above the range, with the FTSE making a new record high at8,697 points. But, since last Thursday the UK 100 index has been showing some weakness, retreating lower as the White House applied tariffs on Canada and Mexico. However, the risk sentiment improved as tariffs were delayed and yesterday buyers returned, so the FTS surged higher.
GBP/USD Live Chart
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