Dollar Index Flips Back Under 102 Following Rating Downgrade

Published on Aug 02, 2023 13:30

The US dollar index is easing today as three week highs above 102 mark are capping the upmove after recent spurt and a ratings downgrade is also hurting the sentiments. Fitch ratings agency downgraded the United States` long-term ratings yesterday. It noted that the rating downgrade of the United States reflects the expected fiscal deterioration over the next three years, a high and growing general government debt burden, and the erosion of governance relative to `AA` and `AAA` rated peers over the last two decades that has manifested in repeated debt limit standoffs and last-minute resolutions. In Fitch`s view, there has been a steady deterioration in standards of governance over the last 20 years, including on fiscal and debt matters, notwithstanding the June bipartisan agreement to suspend the debt limit until January 2025. The US dollar index could see some moderation following this as markets eye the changing monetary policy dynamics in light of the latest US Fed statement and continued moderation in the inflationary pressures. The US Dollar index currently quotes at 101.93, down 0.15% on the day.