Will the U.S. See a Credit Downgrade — Even if Default is Avoided?

U.S. dollar a little higher today in forex trading

There is some speculation that a U.S. credit downgrade is inevitable — even if a debt default is avoided. Concerns about how credit ratings agencies are likely to react to what’s next for the U.S. debt ceiling are weighing on markets.

However, the worries about the U.S. credit rating aren’t impacting the U.S. dollar much in forex trading. Today, the dollar is mostly higher, gaining against the euro and the pound. Many believe that the U.S. won’t actually default on its debt, so the prospect of a lower credit rating isn’t as scary as it could be.

The real concern that some have is the possibility that the U.S. will be in this same position in a few more months. If the budget isn’t brought under control, and if the debt ceiling isn’t raised sufficiently, these problems are likely to repeat themselves quite soon. 

See Also

• Economic News and the U.S. Dollar
  Forex trading ideas