S&P Cuts Outlook On US Debt

Standard & Poor's credit rating agency has changed it outlook of the long term US debt to negative, citing doubts that the government will manage to address the huge budget deficit as agreement between parties seem difficult so far. Although it reaffirmed the AAA rating for the US debt, the credit rating agency, at the same time, stated that the US deficit is significantly bigger than that of the other highest quality government bonds around the globe. After the news hit the wires, the interest rates on the Treasuries jumped and the US Dollar (USD), which was trading generally higher earlier, tumbled across the board. It fell against the Euro (EUR), Japanese Yen (JPY), Swiss Franc (CHF) and other major currencies. The EUR/USD jumped from 1.4260 to 1.4340s, and the USD/CHF plunged from 0.8990 all the way to 0.8903. And while those two currency pairs have recovered a little from the intraday lows, the USD/JPY is still sliding lower, currently trading at 82.50.