Dollar falls against major currencies after US credit rating downgrade

On May 19, the US dollar fell against a number of foreign currencies following the downgrade of the American government's credit rating.

On Friday, Moody's became the last of the influential rating agencies to downgrade the highest sovereign credit rating of the US from AAA to AA1, citing the federal government's large debt of $36 trillion.

The agency's decision caused the dollar to decline against major currencies, reversing earlier gains from improving relations with China.

The US dollar fell 0.79% to 144.750 yen, while the euro rose 0.89% to $1.12750.

The pound sterling increased 0.83% to $1.33840 as traders focused on the progress of negotiations between the EU and the UK.

Britain was poised to agree on May 19 on the most significant reset in relations with the European Union since Brexit, looking to closer cooperation on trade to help boost the economy.

The Australian dollar rose 0.56% to $0.64400 after three days of declines ahead of the Reserve Bank of Australia's interest rate decision announcement on May 20. It is expected to be cut by a quarter of a percentage point.