Scotiabank analysts Shaun Osborne and Eric Theoret note that the Pound is underperforming after a disappointing UK employment report. Softer job gains and wages keep domestic risks elevated into CPI, retail sales and PMI data. Markets now fully price a Bank of England rate cut in April and another in November, with GBP/USD support seen near 1.3525 and 1.3500.

Pound slides as cuts fully priced

"Domestic risk remains elevated into Wednesday’s CPI and Friday’s retail sales."

"The preliminary PMIs will also be released on Friday and the data will continue to set the tone for expectations around the BoE, as policymakers and market participants assess the extent of easing required."

"A cut is fully priced for April, with another fully priced for November following the latest jobs data."

"For GBPUSD, we look to near-term support at the 50 day MA (1.3525) and see additional support at the psychologically important 1.35 level."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)