Coronavirus Crisis Forces BoE to Cut Rates and Increase QE, GBP/USD & FTSE 100 Rise

GBP/USD Analysis and Talking Points

• Bank of England Delivers Emergency Rate Cut to 0.1% and Launches QE
• GBP/USD and FTSE 100 See Muted Response

Bank of England Delivers Another Emergency Rate Cut

Bottom Line: As the spread of coronavirus has deteriorated sentiment significantly since the last Bank of England emergency rate on March 11th and in light of a plethora of stimulus measures by central banks across the globe. The BoE have delivered yet another rate cut to a record low 0.1%, while also increasing their QE program by £200bln to £675bln.

Market Reaction. In reaction to the announcement, the Pound has seen a modest uptick, breaking back above 1.17 while the FTSE 100 has also pushed higher. However, keep in mind that this had been entirely expected to take place, given that central banks across the globe have been easing monetary policy aggressively in order to combat the coronavirus crisis.

FTSE 100, FTSE 250 Impact when Bank of England Cuts Interest Rates

GBP/USD Price Chart: Daily Time Frame

Source: IG Charts

FTSE 100 Reaction to Bank of England Rate Cut

Source: IG Charts

— Written by Justin McQueen, Market Analyst

Follow Justin on Twitter @JMcQueenFX