The U.S. Dollar continued its slide, hitting a new 5-month low versus a basket of six major currencies on the announcement that Britain could also be facing a lowering of its current Triple-A rating and adding fuel to the ongoing worry that the U.S.’s credit rating could also suffer the same fate. The Dollar Index was nearing its largest 1-week drop following the U.S. Federal Reserve Bank’s decision to inject more dollars in the global monetary system.
According to one investment manager in Tokyo, the S&P criterion mandates the downgrading of debt on a country whose GDP and debt burden are nearly equal. Most investors believe that if Britain’s debt is downgraded, then the U.S.’s downgrade would likely be forthcoming. Moody’s Investor Service commented that while they are currently satisfied with the U.S. rating, it can’t guarantee it will keep it.
The U.S. Dollar Index, used to gauge the U.S. currency’s performance versus a basket of other major currencies, slipped to 80.210 .DXY, the lowest price since late last year. The U.S. Dollar lost .2% versus the Yen, trading at 94.15 Yen, a slight rebound from an earlier low of 93.86 Japanese Yen on the EBS trading platform.