The dollar index (DXY00) today is down by -0.71% and fell to a 1-week low. The dollar is under pressure today after Moody’s Ratings late last Friday downgraded the US government’s credit rating from Aaa to Aa1, citing a ballooning budget deficit and fiscal concerns. The downgrade puts the dollar’s status as a global reserve currency into question and may prompt investors to liquidate dollar assets. Today’s drop in the US Apr leading economic indicator by the most in over two years was also bearish for the dollar. Hawkish Fed comments today are limiting losses in the dollar.
Fed Vice Chair Jefferson said Fed policy is in a "very good place" and is having a "moderately restrictive" effect on the economy. He added, "given the level of uncertainty that we're facing right now, I believe that it is appropriate that we wait and see how government policies evolve over time and their impact" on the economy.
