The British Pound Sterling had its worst month for UK factories in August, since the onset of the COVID-19 crisis, with orders dropping significantly due to higher interest rates. The figures have remained below the 50-mark for six consecutive months.

Huw Pill, the Chief Economist of the Bank of England (BoE), noted last week that inflation rates in the UK are still too high and expects a more aggressive monetary policy from the BoE and putting pressure on the Pound Sterling as investors remain concerned about the negative impact on the UK economy.

The market on Monday remained subdued due to the Labor Day holiday in the United States, and the US Bureau of Labor Statistics reported on Friday that the Non-Farm Payrolls (NFP) for August stood at 187K, which is higher than the expected 170K and the previous announcement of 157K. Furthermore, the unemployment rate increase currently standing at 3.8%.

There are expectations in the market that the Federal Reserve (Fed) may not raise interest rates at their September meeting, and the likelihood of rate hikes in November and December has decreased to only 35%.

Source: Fxstreet