By: Barbara Zigah
Following Friday’s announcement by Standard & Poor’s rating agency that the U.S. credit rating was to be downgraded to AA+ from their top-of-the-line AAA rating, the U.S. Dollar is under heavy pressure in Asian trading today, falling against all major currencies. The Euro surged following the G7’s announcement late last night that they would intervene in the European bond markets to ensure price stability and restore confidence. As reported at 2:35 p.m. (JST) in Tokyo, the Euro was 0.3% higher against the greenback, at $1.4313, a retreat from an earlier high of $1.4432.
Investors’ concern sent safe haven currencies higher; against the Japanese Yen, the U.S. Dollar slipped to a low off 77.60 Japanese Yen before settling most recently at 77.84 Yen, while against the Swiss Franc it struck a fresh low when it hit under 0.7500 Swiss Francs. In the past month, the U.S. Dollar has lost nearly 4% of its value against the Japanese Yen, and some 6% of value against the Swissie. The fresh highs for both the Swiss Franc and the Japanese Yen are causing their own worries, with investors expecting more intervention by their respective central banks to curtail their appreciation.