After downgrading the credit rating in America, the dollar is falling apart

After downgrading the credit rating in America, the dollar is falling apart

On Wednesday, the value of the dollar decreased due to Fitch’s decision to lower the credit rating of the United States. This action raised concerns about the country’s financial future. However, the dollar received some backing from a set of positive economic data.

The US rating was downgraded from AAA to AA+ by Fitch, causing frustration from the White House and surprise among investors. This occurred two months after the debt ceiling crisis was resolved. As a result, the dollar decreased in value while the euro rose, reaching about $1.10. During the latest trading session, the euro increased by 0.11 percent, reaching $1.0996, with its highest point of the session at $1.1020.

In the latest trading, the pound sterling increased by 0.05 percent, reaching $1.2782. Meanwhile, the US dollar index rose by 0.09 percent to 102.09 points, after experiencing a significant fall due to Fitch’s decision.

We do not believe that Fitch’s decision will have a significant impact. Although there was a slight market reaction this morning, we do not expect it to be a significant factor in the long run.

On Tuesday, economic data revealed that employment opportunities in the United States are consistent with a tightening labor market despite falling to the lowest level for over two years in June. This news supported the dollar.

On Wednesday morning, the value of the Japanese yen increased by 0.1 percent against the dollar, reaching 143.21 per dollar. However, it later decreased slightly, reducing some of the earlier gains.

The value of the Australian dollar increased by 0.12 percent to $0.6621. This recovery comes after a previous drop of 1.57 percent caused by the Reserve Bank of Australia’s decision to maintain unchanged interest rates on Tuesday.

The value of the New Zealand dollar dropped by 0.23% to $0.6136 due to the release of data on Wednesday that revealed the country’s unemployment rate had reached a two-year high during the second quarter.