EUR/USD turns upside down as US Dollar bounces back
EUR/USD gives back intraday gains and turns down to near 1.1230 during Tuesday’s North American session. The major currency pair faces selling pressure as the US Dollar (USD) recoups initial losses, driven by Moody’s downgrade to the United States (US) Sovereign Credit. The US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, claws back early losses after attracting bids near the weekly low of 100.00.
On Friday, Moody’s downgraded the US credit rating by one notch to Aa1 from Aaa. This move shifted the focus of financial market participants to the growing $36 trillion US government debt pile and fiscal imbalances, which would lead to a long-term increase in the cost of capital for the US administration.
Investors are worried that the US debt issues are expected to widen further, with US President Donald Trump's “big beautiful bill” likely adding $3 trillion-$5 trillion to the already giant debt stress.
This has renewed concerns over the US Dollar’s credibility, which has already been battered by “ever-changing” headlines on the tariff policy by Washington.
Source: Fxstreet
