Fitch downgrades UK’s credit rating

The credit rating agency Fitch lowered the U.K.’s credit rating to AA+ from AAA in a further sign that the economy and reforms are struggling.Fitch downgrades UK's credit ratingThis hit Sterling hard, after a strong surge during early London trade, it went from 1.1759 down to mid-1.1650’s, with GBP/USD moving below 1.53 and EUR/USD bouncing between mid-1.31’s and 1.3085.

As the G20 summit came to a close on Friday we saw the confirmation, again, that Japan is well within its rights to continue on it monetary easing to return the nation to growth and inflation by 2014.

The Italian election is back on the cards this week, after the country remains split over which party to elect with hopeful Pier Luigi Bersani deciding to step down from his party’s race over his failure to secure election or a coalition party.

This week will be relatively quiet but we kick the week off on Tuesday with Public Sector Borrowing figure expected to show another rise. Big ticket data will start on Wednesday when it is confirmed whether or not the U.K. has avoided a triple dip recession with conflicting reports ranging from marginal to no growth up to a triple dip recession.

After ECB member Jens Weidmann successfully weakened and strengthened the euro last week we have a quiet week coming up with notable data on Tuesday that will see Eurozone Manufacturing and Services PMI expected to show a deficit for the region with Germany’s Manufacturing expected to reveal another month of deficit but growth in Services.

Quite a busy week for the American money markets coming up starting with more positive data for Existing Home Sales and also Tuesday’s New Home Sales figure is expected to rise again in a bullish sign for the property market in America.

Durable Goods Orders on Wednesday are expected to have declined. Thursday, Initial and Continuing Jobless claims are expected to show a slight fall. Friday, is the big ticket data with the GDP release, expected to show a whopping 3% growth compared with 0.4% last quarter.

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