​​​​​​​GBP outperforms modestly – Scotiabank

The Pound Sterling (GBP) weakened following yesterday’s BoE policy decision, with the initial reaction driven by a dovish tilt to the policy vote split (hawkish MPC member Mann and one other voted for a 50bps cut), Scotiabank's Chief FX Strategist Shaun Osborne notes. 

Markets reassess BoE policy outlook

"Governor Bailey stressed a cautious and gradual approach to policy adjustment moving forward. BoE forecasts for weak growth and higher inflation may add to concerns that Chancellor Reeves fiscal plans may be disrupted by the sluggish economy. BoE economist Pill speaks shortly." 

"Despite this week’s volatility, the GBP is sustaining the technical improvement seen since the mid-January bull reversal from 1.21 by holding above the four-month bear trend line that guided the pound lower from its late September peak." 

"Solid net gains on the week suggest more sustained gains above 1.25 in the short run which would support a push through to 1.2610 (38.2% Fib retracement of the late September/January decline)."