GBP rally above 1.34 quickly fades – Scotiabank

Pound Sterling’s (GBP) post-BoE push through 1.34 has reversed alongside a broader US Dollar (USD) rebound, leaving GBP/USD back near the middle of its recent range. A narrow 5–4 vote to cut rates underscored how finely balanced policy decisions have become, with markets still leaning toward a follow-up cut in April but showing less conviction beyond that, Scotiabank's Chief FX Strategists Shaun Osborne and Eric Theoret report.

BoE split vote keeps April cut in play

"Cable’s advance through 1.34 following the BoE decision unwound in line with the broader rebound in the USD. Policymakers voted to cut 25bps, as expected yesterday. The vote split was a tight 5-4 in favour of easing."

"The Bank noted that judgement on further easing will become a 'closer call' but you can’t get much closer than 5-4. Markets are sticking with pricing for a likely follow-up cut in April but are less certain about additional easing beyond that."

"Sterling is just about holding the mid-point of the past week’s range, with support around 1.3300/10 and resistance at 1.3450/60. The most the charts say at this point is that the GBP’s rebound from its Nov low has stalled. More range-trading is likely for now."