GBP/USD at risk of additional weakness - Scotiabank

Analysts at Scotiabank explained recent data events, BoE and call for a lower pound.   

Key Quotes:

The UK reported a wider trade deficit for Mar (-GBP12.3bn versus -11.3bn expected) while industrial production rose 0.1% (against calls for a 0.2% rise (manufacturing output fell 0.1% and construction was as weak as expected at -2.3%).

"The BoE left policy on hold, as expected, with the MPC voting 7-2 for unchanged rates."

"The policy statement suggests no rush to raise rates in the near-term and markets have moved quickly to price out the risk of additional rate increases this year."

"With the domestic political backdrop difficult and BoE rate expectations evaporating, the pound looks at risk of additional weakness."

"Risks appear to be tilted towards a push lower towards 1.33/1.34."