The U.S. dollar fell broadly on Monday, hitting its lowest point in more than a week against the yen, Swiss franc and euro, pressured by a surprise downgrade of the U.S. government's credit rating late Friday, even as trade tensions also escalated.

U.S. Treasury Secretary Scott Bessent said in a television interview Sunday that President Donald Trump would impose tariffs at the level he threatened last month on trading partners that do not negotiate in "good faith."

However, Moody's cutting the United States' top sovereign credit rating by one notch on Friday began to weigh on the dollar. Moody's cited concerns about the U.S. government's growing $36 trillion debt pile.

The move follows a similar move by Fitch in the summer of 2023, and an S&P downgrade in 2011.

The news saw the dollar weaken against major currencies after four straight weeks of gains as it was boosted by growing optimism over a U.S. trade deal and a thaw in relations with China that eased fears of a global recession.

But from mid-morning trading through the afternoon session, the dollar selling tapered off.

"To me, it's not really a game changer: Moody's isn't really telling us anything we don't already know. We all know what's going on in Washington and the big budget deficits they're projecting," said Marc Chandler, chief market strategist, at Bannockburn Global Forex in New York.

"But what's happening is Asia and Europe are knocking the dollar. But North Americans like me are like, 'What's the big deal?' So some people are taking advantage of that, buying the weaker dollar."

The U.S. dollar fell to 144.665 yen, its lowest since May 8 on Monday, and was last down 0.5% at 144.98. It also fell to its weakest in more than a week against the Swiss franc at 0.8317 franc. Meanwhile, the euro rose 0.6% against the dollar to $1.1232, after earlier rising to its highest since May 9. Sterling also gained against the dollar, rising 0.6% to $1.3355. Earlier in the session, the pound rose to its highest since April 30, as Britain agreed the most significant restoration of defense and trade ties with the European Union since Brexit on Monday. (Newsmaker23)

Source: Reuters