The week ahead brings pivotal developments for currency markets, as the US Federal Reserve prepares for its first rate cut since December, Fitch’s downgrade of France heightens euro-zone fiscal concerns, and former MPC members call on the Bank of England to slow quantitative tightening amid surging borrowing costs. Together, these shifts underscore the tension between stubborn inflation, rising debt burdens, and central banks under pressure to adjust course, with the dollar, euro, and sterling all in focus.
Current rates
| Currency pair | Rate |
|---|---|
| eur usd | 1.1732 |
| gbp eur | 1.1573 |
| gbp usd | 1.3582 |
Rates correct as of 09:25am on Monday 15 September but may now have changed.
The Big 3
Three stories covering the latest developments in economies, currencies and borders.
US Fed expected to cut rates
Markets expect the Federal Reserve to cut rates by 25 basis points at its September 16–17 meeting. Investors are focused on how dovish the Fed’s guidance will be, as officials weigh a weakening labour market against stubborn inflation. A clear easing signal could weaken the dollar in the short term, while a cautious or hawkish tone could limit losses or even support it.
[Reuters]
Fitch downgrades France
Fitch Ratings has cut France’s sovereign credit rating from AA- to A+, its lowest ever from a major agency, citing rising debt, political instability, and weak prospects for fiscal repair. This downgrade has pushed up French borrowing costs and raised concerns over euro-zone fiscal stability. The euro may come under pressure if spreads widen further and investors lose confidence in the bloc’s fiscal outlook.
[Euronews]
Quantitative tightening slowdown, inflation, and fiscal pressures
Former MPC members are urging the Bank of England to slow its quantitative tightening programme, warning that heavy gilt sales are driving borrowing costs to 27-year highs. While sticky inflation limits the scope for near-term rate cuts, the combination of elevated yields and fiscal pressures adds downside risk for sterling.
[The Guardian]
Looking forward
- Monday: China retail sales, China industrial production.
- Tuesday: US retail sales, UK labour market data.
- Wednesday: Fed and Bank of Canada interest rate decisions, Trump UK visit
- Thursday: Bank of England interest rate decision.
- Friday: Bank of Japan interest rate decision.
Here’s what we’re talking to our clients about
We’re always here to support. Here are some of the conversations we’re having:
- Trump’s visit to the UK
- The aftermath of the protests during the weekend
- Big Central Bank week this week – how will it move the markets?
The contents of this article do not constitute financial advice and are provided for general information purposes only.