The BOE arguably gave its clearest indication that it is prepared to cut rates if necessary due to the virus outbreak
The message here is what is helping to weigh on the pound further in the past hour as we see cable ease to a low of 1.2762 before recovering a little currently towards 1.2780.
It is going to be a tough few weeks for the pound to navigate through as now virus concerns will also be a key factor on the currency if the BOE becomes more dovish.
Add to the fact that we will see post-Brexit trade negotiations begin today - and it isn't going to be pretty - that may see further pressure on the currency moving forward.
Put those two factors together, it is hard to see how the pound might be able to find any momentum for a decent rally higher until either one of the situation changes.
In any case, perhaps selling on rallies against the dollar may not be the best bet considering the erosion of real yields in the US currently. If anything, the EUR/GBP squeeze higher and perhaps GBP/CHF shorts look rather attractive if virus fears continue to play out.
