Australian dollar edges down on China's dipping sovereign rating

Australian dollar edges down on China's dipping sovereign rating

On Wednesday, the Australian dollar tumbled because Moody's Investors Service dared to downgrade China's credit rating to from Aa3 to A1, changing its outlook from negative to stable, citing hopes that China's financial strength will erode in the nearer future.

Estimating the greenback’s value versus a trade-weighted basket of six crucial currencies, the US dollar index went down 0.03%, demonstrating 97.25.

The currency pair AUD/USD slumped 0.24%, being worth 0.7462. Meanwhile, CNY/USD declined to 6.8901, which is 0.1% below late US levels. As for USD/JPY, this currency pair hit 111.79, tacking on 0.01%.

Moody's actually expects that China’s economy-wide leverage will grow further over the coming years. Obviously, the planned reform program is slowing, though it can’t hamper the rise in leverage, as Moody's revealed in its statement.  

Overnight, the evergreen buck bounced off  its minimums notwithstanding the publication of mostly dismal economic data, thus powering worries that slowing economic surge would prevent the Fed from adopting an aggressive rate lift policy.

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