GBP/USD: rate expectations have softened, Brexit weighs - Scotiabank

Analysts at Scotiabank explained that GBP is weak vs. the USD and underperforming all of the G10 currencies with the exception of AUD. 

Key Quotes:

"Domestic politics remain a key focus as market participants consider the anticipated delay in the U.K. government’s proposal for its future trading arrangement with the EU.

Negotiations are set to begin in March.

BoE risk is elevated heading into Thursday’s policy decision (expected hold) and Quarterly Inflation Report, with a focus on Gov.

Carney’s press conference tone as well as the MPC votes.

Rate expectations have softened recently and OIS are currently pricing a 50% chance of a hike for May."