RTTNews - The dollar hit fresh multi-month lows versus the sterling and a basket of resource-linked currencies on Wednesday, failing to benefit after Moody's Investors Service said that its Aaa credit rating on the U.S. has a stable outlook despite the significant deterioration in the government's debt position.
Moody's said the US demonstrates the attributes of a Aaa sovereign, including a diverse and resilient economy, strong government institutions, high per capita income, and a central position in the global economy.
Steven Hess, Moody's Vice President and author of the report said, Moody's expects that, because of these factors, U.S. economic strength will emerge after the crisis without major impairment.
Meanwhile, with first-time buyers continuing to influence the housing market, the National Association of Realtors released a report on Wednesday showing that existing home sales in the month of April increased by slightly more than economists had been expecting.
The report showed that existing home sales rose 2.9 percent to an annual rate of 4.68 million units in April from a downwardly revised rate of 4.55 million units in March.
Following a brutal stretch that sparked the credit crisis and eventually a severe global recession, the housing market had shown some signs of bottoming, but yesterday a report indicated home prices in the US dropped during the first quarter at the fastest pace on record.
On Wednesday, the dollar dropped to 1.6085 versus the sterling hitting its lowest level since November 2008. The buck has plunged more than 25 cents since hitting a 23-year high of 1.3501 in January during the throes of the financial crisis.
While the buck continued to take a beating versus its UK counterpart, it found traction against the euro, holding near 1.3900 in choppy trading. Last week the dollar hit a four-month low of 1.4050 versus the euro, but has been stable since, as the euro zone economy is expected to lag behind any global recovery.
The dollar was also steady versus the yen, hovering above 95 in afternoon trading. Last week, the dollar slipped to a two-month low of 93.84, but will likely stabilize for the time being on the Moody's ratings news.
Oil prices hit their highs of the year near $64 a barrel as OPEC ministers prepared to meet in Vienna. Accordingly, the petro-linked loonie continued to batter the dollar. The buck slipped below C$1.11 for the first time since October 2008.
For comments and feedback: contact firstname.lastname@example.org