Fitch submarines pound by placing UK on Ratings Watch Negative

  • Fitch places UK on ratings watch negative
  • See ‘heightened probability’ of downgrade in near term
  • Expects to complete its review of the UK’s rating by the end of April
  • Ratings Watch Negative reflects the latest economic and fiscal forecasts from the OBR
  • Forecasts indicate govt debt will peak later and at a higher level than previously expected by Fitch
  • Full text of the statement

Cable immediately dropped a half-cent to 1.5191 but has bounced to 1.5219. I think you can pretty much take it to the bank that Fitch will downgrade the UK.

Author: Adam Button

Adam Button is the editor of ForexLive™. He was previously the chief currency strategist at XForex and has also worked with Intermarket Strategy. Adam believes deeply in the value of knowing every tidbit of news. He has a background in journalism and was formerly the head of the markets team at the Canadian Economic Press. He is a graduate of Ryerson University and completed Level 1 of the CFA program. Adam lives in Montreal, follow him on Twitter: @FX_Button.

4 Comments

  1. Hi Adam, fundamentally do you still see futher lows (sub 1.5) in cable? I only trade upwards due to positive carry, but would like to catch the climb back to the 1.6s, whenever that happens.

  2. The French are downgrading the British. Hollande must be in real trouble over that Finance Minister thing…

  3. I am beginning to understand how this market work. Now Fish is not happy that pound higher now they are coming out with a negative news to pull pound down. What a way to go. Fish I hope you fail this time.

  4. Hi r,
    Fundamentally it does not make sense for Cable to head up but we are looking for bullish reversal for next quarter at the very least, probably heading back to the 1.60 area.

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