Yesterday, Moody’s, the rating agency with “stellar” record for predicting the Lehman Brothers’ demise, said it placed the US government’s Aaa bond rating on review for a possible downgrade owing to “a small but rising risk” of a some sort of a default, as politicians keep bickering about raising the US debt ceiling.
The US dollar lost some ground against other major currencies yesterday, after minutes of FOMC’s April meeting demonstrated that its officials were not united on when to start tightening monetary policy, some of them being concerned that tighter policy could harm the economic recovery in the US.
The US dollar gained quite a few pips against the euro and went up against the British pound today, after European Union leaders agreed on a plan that was largely in line with forex traders’ lowest of expectations, MarketWatch reports.
Losses in the euro were limited, however, as a closely tracked gauge of German business sentiment reached a record high, hinting at fundamental strength in the region’s biggest economy.
EUR/USD is trading at 1.3142 at the moment.
The US dollar was slightly lower versus most major rivals in the forex market, with the euro stabilizing after a successful Greek T-bill auction calmed down chronic sovereign-debt concerns.
“The dollar hit a wall of resistance earlier in Tuesday trading after three daily gains against the currency majors,” said Andrew Wilkinson, strategist at Interactive Brokers in Greenwich, Connecticut, as cited by Market Watch.
