GBP/USD slides further after expected BoE rate cut - Scotiabank

The Pound Sterling (GBP) slid in the wake of the BoE rate decision, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

GBP/USD underperforms on the day

"The policy rate was cut 25bps to 4.50% as expected but two MPC members voted for a 50bps cut--one being Mann, who is typically more hawkish. UK yields have slipped and swaps are pricing in a little more easing risk. BoE Governor Bailey said the Bank would follow a 'gradual and careful approach to reducing rates, however." 

"The GBP was trading defensively ahead of the BoE policy decision after the January Construction PMI showed a sharp and unexpected drop back to 48.1. A small improvement on December's 53.3 reading was forecast."

"GBP has traded softly on the session, easing back under the 40-day MA support (1.2441) to near the 1.24 level. Short-term price action suggests a minor peak at least formed yesterday at 1.2550. Corrective losses are testing support in the mid-1.23s at writing."