Trade-related uncertainties, ballooning fiscal debt and weakened confidence about enduring U.S. exceptionalism have weighed on U.S. assets, with the dollar one casualty. Investors see the currency losing more of its luster as the greenback comes back to earth from lofty valuations.
The administration of U.S. President Donald Trump's tariffs salvo this year prompted investors to cut exposure to U.S. assets after a long period of overperformance. While the U.S. currency steadied somewhat in recent sessions as investors took heart from a truce in the ongoing U.S.-China trade war, it came under renewed selling pressure after ratings agency Moody's cut the United States' pristine sovereign credit rating by one notch.
"There's plenty of room for further depreciation, purely from a valuation perspective," said George Vessey, lead FX and macro strategist at payments firm Convera. The "sell America" trade was back in focus after Moody's U.S. credit downgrade, he said.
With your current subscription plan you can comment on stories. However, before writing your first comment, please create a display name in the Profile section of your subscriber account page.