This week’s GDP print is the highlight in the United Kingdom. As the Bank of England (BoE) is set to fail to meet market expectations for hikes, economists at Scotiabank expect the GBP/USD pair to test the 1.20 mark.

BoE will fail to meet expectations for hikes at each of the four remaining meetings of 2022

“A quiet domestic backdrop means the GBP will have to wait until Thursday’s Q1/Mar GDP release to stand out from the pack (not necessarily positively) while we maintain that it continues to face downside risks from overpriced BoE expectations.” 

“A 25bps hike at the mid-June meeting seems likely, but beyond that we think the bank will fail to meet expectations for hikes at each of the four remaining meetings of the year and it may even choose to pause as soon as August.”

“There’s a significant chance that the GBP trades to a test of 1.20 in the coming weeks.”