GBP/USD Falls Below 1.3500 as BoE Rate-Cut Odds Surge
The British Pound slid to a four-week low against the US Dollar, trading decisively below the 1.3500 psychological level as markets ramp up expectations for an imminent Bank of England (BoE) rate cut. February inflation unexpectedly cooled and preliminary Q1 2025 GDP showed stagnation, driving market-implied probabilities of a 25bp BoE cut at the next meeting above 65% (up from ~30% a month earlier). The narrowing yield gap between UK and US bonds and continued USD demand — supported by resilient US jobs and consumer spending and safe-haven flows — are pressuring GBP/USD. Technicals confirm short-term bearishness: breach of 1.3500, series of lower highs/lows, a 50-day/200-day “death cross,” while RSI nears oversold. Key upcoming catalysts include the April BoE MPC statement, late-March UK CPI and wage data, and April US Non-Farm Payrolls. Traders should expect heightened volatility; a sustained GBP recovery would require UK data to surprise to the upside or a marked weakening in US data. Main keywords: GBP/USD, Bank of England, rate cut, UK inflation, USD strength.
Bearish
This development is bearish for risk assets sensitive to FX and yields, including crypto, because a weaker GBP versus a stronger USD reflects higher expected policy divergence favoring the US. Markets now price a >65% chance of a BoE 25bp cut, eroding the UK yield premium and prompting capital flows into USD-denominated assets. Short-term technicals (break below 1.3500, death cross, lower highs/lows, RSI near oversold) signal further downside or choppy selling pressure. For crypto traders, a stronger USD and risk-off flows typically pressure crypto prices in the near term as investors seek fiat liquidity and safe-haven USD assets. Historically, periods of USD strength and tightened US-relative yields (e.g., post-surprise dovish shifts elsewhere) correlate with short-term crypto price weakness and lower risk appetite. Over the medium term, impact depends on subsequent data: if UK data reverses and BoE delays cuts, GBP could rebound and risk sentiment may recover, aiding crypto. Conversely, persistent BoE dovishness and resilient US growth would sustain USD strength and continued pressure on risk assets. Traders should watch BoE communications, UK CPI/wages, and US NFP — use tighter risk controls, reduce leverage around data, and consider USD-hedged positions or short GBP crosses if expecting continued downside.