FX.co ★ Dollar Weakens on US Downgrade

The US dollar index dipped to approximately 100.7 on Monday, following an unexpected downgrade of the US government's credit rating. Moody's Ratings announced late Friday that it was lowering the US from its premier credit rating, decreasing the country's status to Aa1 from Aaa. This decision was based on a widening budget deficit and escalating interest costs. Contributing to the dollar's decline, a series of predominantly weak economic data released last week have increased expectations that the Federal Reserve may implement two interest rate cuts before the year's end. Additionally, US Treasury Secretary Scott Bessent stated on Sunday that President Donald Trump plans to enforce the tariff rates he threatened last month on trading partners who do not engage in negotiations in "good faith." Consequently, the US dollar weakened against several Asian currencies.