Futures Market News
Dollar drops as credit service warns about 2013 budget discussions
Sep 11, 2012 03:20 PM
Tuesday saw the world's reserve currency pinched by Moody's Investors Service warning of a potential credit rating reduction next year, Reuters reports.
As the U.S. dollar endures pressure from expectations of quantitative easing announced by the U.S. Federal Reserve as early as this week, the credit rating service's warning about the AAA debt rating applied to 2013 budget discussions if they do not prompt a lower ratio for debt to gross domestic product. The U.S. Commerce Department indicated on Tuesday that July saw the U.S. trade deficit increase.
"July's trade figures are nowhere near as good as they look at first sight, as they mask a significant deterioration in export growth to the euro zone," states a note penned by senior U.S. economist Paul Dales with Capital Economics, according to MarketWatch. "What's more, the full impact on the U.S. economy from the overseas slowdown has yet to be felt."
Tuesday also saw a reduction in the dollar index, which gauges the strength of the world's reserve currency against six rival monetary units.
The policy-making arm of the U.S. Federal Reserve is set to convene two days of meetings beginning Wednesday so an announcement about additional asset purchases to spur the economy could come as soon as Thursday.
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