Impact Of Bank Of England Rate Cuts On GBPUSD

India’s bank loan growth rose to 10% in July, up from 9.8% before. This increase shows a higher demand for credit in the country. The EUR/USD currency pair is steady around 1.1650 as the US Dollar begins to recover. There is growing anticipation for the upcoming US inflation data release, which could sway market trends. The GBP/USD pair dipped below 1.3450 after its previous rise. The Bank of England’s recent decision to cut rates played a role in this shift, affecting market sentiment. Gold prices stabilized near $3,400 per ounce, giving back some of its recent gains. New taxes on certain gold bars from the US are impacting the market. In the cryptocurrency market, optimism is rising as Bitcoin approaches $118,000. Ethereum and XRP also show stronger performances, reflecting overall market positivity.

Focus On India’s Economic Performance

The Bank of England lowered rates by 25 basis points to 4%, indicating possible changes in economic policy. Concerns about persistent inflation remain significant. Forex trading carries considerable risks due to leverage and market fluctuations. Traders should carefully assess their strategies and knowledge before participating in these markets. We are closely monitoring the US Dollar as the EUR/USD pair hovers around 1.1650. The upcoming US inflation data is crucial; a higher-than-expected result might solidify the Federal Reserve’s stance on keeping interest rates high, potentially boosting the dollar. This expectation has built up since the Fed’s last meeting in June 2025, where they adopted a data-driven approach for the remainder of the year. The Bank of England’s rate cut to 4% makes us bearish on the British Pound. Historically, the first rate cut in a cycle, similar to the one after the Brexit referendum in 2016, often marks the beginning of a prolonged period of currency weakness. We will treat any temporary strength in the GBP/USD pair below 1.3450 as a chance to sell. In the cryptocurrency market, the sentiment is optimistic as Bitcoin nears $118,000. Reports from the second quarter of 2025 indicate that institutional investment in digital assets surged by over 20%, fueling this rally. We believe this is a great time to consider long positions through futures or call options on major cryptocurrencies. Gold’s current price near $3,400 an ounce appears uncertain, especially with the new US tax on gold bars causing confusion. Gold prices often struggle when real interest rates rise, which may occur if US inflation stays high. For now, we are taking a neutral position, preferring to wait for clearer market direction. The 10% increase in India’s bank loan growth is a strong sign of economic health. This matches recent reports from Q2 2025 showing India’s manufacturing PMI reaching a two-year high. It suggests a positive outlook for derivatives linked to Indian stocks, particularly in the financial sector. Create your live VT Markets account and start trading now.

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