In early Asian deals on Wednesday, the US dollar eased from a 1-year high against the euro, 9-month high against the franc and a 9-day high against the pound.
The dollar surged up yesterday as investors moved toward safe-haven currencies on renewed concerns about debt worries in some eurozone nations.
In a sign of continued concerns about the Greek debt crisis, Standard and Poor’s said yesterday that it is lowering its ratings on Greece’s debt to junk status, slashing its ratings to BB+ from BBB-.
S&P cited that the downgrade to junk results from its updated assessment of the political, economic, and budgetary challenges that the Greek government faces in its efforts to put the public debt burden onto a sustained downward trajectory.
S&P also said it lowered its long-term local and foreign currency sovereign issuer credit ratings on Portugal to A- from A+, while it cut the local and foreign currency short-term ratings to A-2 from A-1. The ratings agency also said that the outlook is negative.
Markets in Europe and the United States tumbled yesterday in reaction to signs that the Greek debt crisis was spreading to other highly indebted states on the periphery of the euro zone. Asian markets opened lower today.
The dollar that soared to a 1-year high of 1.3146 against the euro at 5:30 pm ET Tuesday slipped thereafter. At present, the dollar is worth 1.3206 against the euro with 1.340 seen as the next downside target level.
The dollar fell against the Swiss franc after reaching a 9-month high of 1.0902 at 5:30 pm ET Tuesday. Currently, the dollar-franc pair is worth 1.0857. If the pair weakens further, it may find support near the 1.050 level.
The dollar climbed to a 9-day high of 1.5228 against the pound before losing ground at 5:30 pm ET Tuesday. As of now, the dollar is trading at 1.5270 against the pound. The next downside target level for the US currency is seen at 1.548.
The Italian business confidence report for April has been slated for release in the upcoming European session.
The U.S. Federal Open Market Committee is scheduled to announce its interest rate decision at 2:15 pm ET.