GBPUSD Above 1.24, FTSE Record High After BOE Gov Bailey Speech
The FTSE 100 continues to remain bullish, printing another record high today, while GBP/USD returned above 1.24 after BOE Bailey’s speech.
The GBP/USD pair turned bearish in October, sliding from above 1.34 to just below 1.21 by mid-January, a decline of over 13 cents. However, after Donald Trump took office and delayed tariff implementation, the pair rebounded by 4 cents to 1.25 in recent weeks. This recovery was short-lived as the US dollar regained strength, pushing GBP/USD back below the 50-day SMA (yellow).
Adding to the downward pressure, the Bank of England (BoE) cut interest rates by 25 basis points at its last meeting, with expectations of further rate cuts if tariffs are implemented. If this scenario unfolds, GBP/USD is likely to dip below 1.20, signaling continued weakness for the British pound.
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FTSE 100 Extends Bullish Momentum
In contrast to the struggling pound, the FTSE 100 has been on a strong upward trajectory in 2025. The index continued its bullish run yesterday, surging toward 8,800 points after a sharp rally. Since hitting a December low of 8,000 points, the FTSE 100 has climbed 10%, demonstrating resilience despite global uncertainties.
With investors favoring UK equities, the index remains in a strong position, benefiting from a combination of currency weakness and steady market optimism. If bullish momentum persists, the FTSE 100 could target new highs in the coming weeks.
BOE Governor Andrew Bailey spoke earlier, highlighting the delicate balance between financial oversight and economic expansion, suggesting that more regulation isn’t always the answer. With growing concerns from policymakers like Reeves, the debate over regulatory reform in the UK’s financial sector is likely to continue.
Comments from BOE Andrew Bailey’s Speech
Pushback Against Regulation:
- Bailey noted a growing resistance to financial regulations and post-crisis responses.
- Spoke at the University of Chicago Booth School of Business in London.
Financial Stability vs. Economic Growth:
- Emphasized that financial stability and economic growth are not in conflict.
- Warned against forgetting the lasting damage of the 2008 financial crisis.
Approach to Vulnerabilities:
- Acknowledged that financial vulnerabilities require action.
- Stressed the need for assessment and intervention tools rather than relying solely on stricter regulations.
Government Concerns Over Regulation:
- Bailey’s remarks follow Chancellor Rachel Reeves’ warning in November about excessive regulation harming growth.
- Reeves argued that some post-2008 regulations may have gone too far, potentially stifling the UK’s financial sector.
GBP/USD Live Chart
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