Pound sterling exchange rates suffered another blow last week as Fitch downgraded the UK’s outlook to negative amidst the current issues economically. The main reason of course was due to the unfunded fiscal package laid out by the Chancellor at his “Mini Budget” 2 weeks ago, and even after walking back the additional tax rate abolition, this has not made a massive difference from a spending perspective for the Government.

GBPUSD rates have now fallen from the 1.14 area which we saw after Sterling regained some ground last week and have settled in the 1.11 area following strong employment figures from Friday’s NFP data for the U.S- It seems that the U.S Dollar will still be the strongest currency for the foreseeable future, with the Fed still looking to raise interest rates and no pivot in sight anytime soon.

From a data perspective- this week we have employment figures in the UK which are very important, it is from now on that we are expecting a slowdown in the jobs market which will indicate the beginning of an economic slowdown in Q4. We also have trade balance data out of the UK, which could be better than usual given the current weakness in Sterling, followed by industrial and manufacturing production.

We also have FOMC minutes this week which should just bolster the case for more USD strength, with the Mid terms coming up in the U.S- we will see a lot of new policy coming from both the U.S Government and the Fed.