Daily Market Analysis By FXOpen

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Analytical Predictions on UK Interest Rates in 2025–2026

The future of UK interest rates is a pivotal topic for traders, investors, and policymakers alike. With inflation easing but economic uncertainties lingering, the Bank of England faces critical decisions that will shape the financial landscape through 2029. This article explores current interest rates in the UK in 2024, expert forecasts for the coming years, and key factors influencing rate movements, offering valuable insights into what lies ahead for the UK economy and financial markets.

UK Interest Rate Environment

The UK's interest rate landscape has undergone significant transformations over the past few years. From the end of 2021 to the middle of 2023, the Bank of England (BoE) raised interest rates from the historic low of 0.1% to 5.25%—the highest in UK interest rates history since 2008. The decision to elevate interest rates from near-zero levels was primarily driven by the need to counteract rising inflation, which has emerged as a considerable threat to the UK's economic stability.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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Nikkei 225 Struggles to Hold Above the Psychological Level

The Nikkei 225 (Japan 225 on FXOpen) has risen nearly 20% in 2024, marking its best performance since 1989, according to Trading Economics. This impressive gain is especially noteworthy considering the market plunge in early August, triggered partly by the Bank of Japan’s historic interest rate hike.

According to today's chart of the Japanese stock market index Nikkei 225 (Japan 225 on FXOpen):

→ Late last week (marked with an arrow), the index surpassed the psychological 40,000 level, reaching a 5-month high.
→ However, as this week began, the Nikkei 225 dropped below 40,000, failing to sustain its position above this key level.

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Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

 

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The Dollar Index Rises by 6.7% in 2024

Throughout 2024, the US dollar traded with mixed dynamics but showed consistent strengthening over the past three months.

According to WSJ and Reuters, the following factors contributed to this growth:
→ Reports of a strong US economy and expectations that further interest rate cuts by the Federal Reserve will be limited.
→ Projections of policies under President-elect Donald Trump, which are anticipated to focus on tax reductions, increased tariffs, and stricter immigration controls.

During the low-volatility holiday trading period, the US Dollar Index—a tool measuring the dollar's strength against a basket of major currencies—hovered around a two-year high, where it may close a strong year.

Meanwhile, the euro remains near two-year lows, but bulls hold onto hope.

TO VIEW THE FULL ANALYSIS, VISIT FXOPEN BLOG

Disclaimer: This article represents the opinion of the Companies operating under the FXOpen brand only (excluding FXOpen EU). It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.