{"id":13474,"date":"2023-05-25T04:05:36","date_gmt":"2023-05-25T08:05:36","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/forex\/dollar-in-demand-after-fitch-signals-possible-u-s-rating-downgrade\/"},"modified":"2023-05-25T04:05:36","modified_gmt":"2023-05-25T08:05:36","slug":"dollar-in-demand-after-fitch-signals-possible-u-s-rating-downgrade","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=13474","title":{"rendered":"Dollar in demand after Fitch signals possible U.S. rating downgrade"},"content":{"rendered":"
\n

Investing.com – The U.S. dollar gained in Europe Thursday, climbing to a two-month high on rising fears of a U.S. default as Fitch threatens a rating downgrade.<\/p>\n

At 02:55 ET (06:55 GMT), the , which tracks the greenback against a basket of six other currencies, rose 0.2% to 103.955, just below the 104.05 overnight peak, the highest level since mid-March.<\/p>\n

The dollar\u2019s safe haven status has meant that it has benefited from the lack of progress in the talks to lift the U.S. government’s $31.4 trillion debt ceiling, with the early-June deadline that Treasury Secretary Janet Yellen said is when it\u2019s \u201chighly likely\u201d that her department will run out of money drawing nearer.<\/p>\n

This uncertainty has resulted in ratings agency Fitch putting the United States’ prized \u201cAAA\u201d rating on watch for a possible downgrade, adding to the jitters in global markets. <\/p>\n

“Fitch still expects a resolution to the debt limit before the X-date,” the credit agency said in a report.<\/p>\n

“However, we believe risks have risen that the debt limit will not be raised or suspended before the X-date and consequently that the government could begin to miss payments on some of its obligations.”<\/p>\n

The dollar has also been boosted by a more hawkish view of the Federal Reserve\u2019s monetary policy actions this year, with the U.S. economy proving resilient to the aggressive tightening to date.<\/p>\n

from the Fed\u2019s last meeting, released Wednesday, showed that officials were divided over whether further interest-rate increases would be necessary to lower inflation, but the labor market and price pressures have all proven more resilient than expected following that May meeting.<\/p>\n

Data due for release later Thursday include U.S. weekly and a second estimate of first-quarter U.S. .<\/p>\n

Elsewhere, fell 0.1% to 1.0739, close to a two-month low, after data released early Thursday showed that the , the largest in Europe, contracted slightly in the first quarter of 2023 compared with the previous three months, thereby entering recession.<\/p>\n

Officials at the have tended to point towards further interest rate increases in order to tame , with Governing Council member Bostjan Vasle the latest to do so.<\/p>\n

However, growth is proving hard to find in the region, and this tone could soon change.<\/p>\n

Bundesbank head and ECB chief economist are both scheduled to speak later this session, and their comments are likely to be studied carefully.<\/p>\n

edged lower to 1.2363, not far removed from its weakest level since April 3, while the risk-sensitive dropped slightly to 0.6541.<\/p>\n

drifted lower to 139.45, just off a six-month high, with the yen suffering after yields extended to highs not seen since mid-March.<\/p>\n

rose 0.1% to 7.0685, with the pair near a near six-month high as fears of a renewed COVID outbreak added to concerns over slowing economic growth in China.<\/p>\n

rose 0.1% to 19.9163 ahead of the latest monetary policy decision by . It is expected to hold rates unchanged for a third consecutive month as it tries to keep the lira stable just days before a presidential runoff.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Investing.com – The U.S. dollar gained in Europe Thursday, climbing to a two-month high on rising fears of a U.S. default as Fitch threatens a rating downgrade. At 02:55 ET (06:55 GMT), the , which tracks the greenback against a basket of six other currencies, rose 0.2% to 103.955, just below the 104.05 overnight peak, […]<\/p>\n","protected":false},"author":1,"featured_media":13475,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[244],"tags":[83],"class_list":["post-13474","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-forex","tag-featured"],"yoast_head":"\nDollar in demand after Fitch signals possible U.S. rating downgrade | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Investing.com - The U.S. dollar gained in Europe Thursday, climbing to a two-month high on rising fears of a U.S. default as Fitch threatens a rating\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ifintechworld.com\/?p=13474\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dollar in demand after Fitch signals possible U.S. rating downgrade | iFintechWorld\" \/>\n<meta property=\"og:description\" content=\"Investing.com - 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