Breaking: GBP/USD tumbles as BOE surprises with 50bp cut to 0.25% ahead of UK budget

Yohay Elam FXStreet

The Bank of England has announced a surprise 50 basis point rate cut from 0.75% to 0.25%.

Both outgoing Governor Mark Carney and his successor Andrew Bailey had previously said that they are ready to act in face of the coronavirus crisis. While the move is not a total surprise, but the timing – outside a scheduled meeting – is responsible for the sharp move in sterling. Moreover, the BOE's new rate of 0.25% puts its at the post-Brexit low, exhausting the "Old Lady's" firepower.

The BOE also announces a new SME worth £100 billion – a lending scheme to businesses. The Monetary Policy Committee has left the bond-buying scheme unchanged at £435 billion.

GBP/USD has dropped from around 1.2935 to a low of 1.2830 before bouncing but remains depressed. Support awaits at 1.2775 and 1.2720. The resistance is at 1.29 and 1.2950.

The government is set to unveil its new budget later today and the move may be coordinated.

See UK Budget Preview: Showing the way with fiscal stimulus? GBP/USD has room to rally

Here is how the move looks on the chart:

GBP USD falls BOE surprise rate cut March 11

More details about the BOE's surprise decision are here.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

EUR/USD keeps its focus on 1.1800

EUR/USD is holding its ground near two-day highs around 1.1750 as Thursday’s session is drawing to a close. The pair is drawing support from a more constructive risk mood, helped by easing EU–US trade tensions and a softer US Dollar. Looking ahead, attention shifts to Friday’s flash PMI releases from both Europe and the US.

GBP/USD flirts with 1.3500 on persistent USD selling

GBP/USD is regaining momentum on Thursday and pushing up towards two-week highs around the 1.3500 mark. In the process, Cable is leaving Wednesday’s brief wobble behind and slipping back into its upward trend, helped by ongoing selling pressure on the Greenback ahead of key advanced PMI data on Friday.

Gold: The $5,000 mark is just around the corner

Gold extends its impresive rally for yet another day on Thursday, this time surpassing the $4,900 mark per troy ounce to hit record highs on the back of the marked pullback in the US Dollar. The move is unfolding even as global risk appetite improves, after Donald Trump reversed course on Greenland, a shift that has helped cool broader geopolitical tensions.

Chainlink Price Forecast: LINK vulnerable to deeper losses amid waning retail demand, staking outflows

Chainlink (LINK) is trading under pressure at $12.20, reflecting heightened volatility in the broader cryptocurrency market at the time of writing on Thursday. The oracle token faces deepening bearish pressure as technical indicators deteriorate and market sentiment weakens.

Trump walks back NATO tariffs, signals de-escalation

What began as a sharp escalation risk quickly turned into a de-escalation signal. Earlier this week, markets briefly priced in escalation risk after Donald J. Trump proposed a 10% tariff hike on eight NATO nations amid the Greenland dispute.

XRP defends $1.90 support as ETFs attract inflows despite retail caution

Ripple (XRP) is consolidating above $1.90, a short-term support level, at the time of writing on Thursday. This mild uptick marks two consecutive days of a strengthening technical outlook, following recent market-wide volatility.