USD softens as Moody's downgrades US credit rating amid fiscal concerns

The US dollar has started the week on a weaker note following Moody's downgrade of the US credit rating late Friday. The move reflects growing concerns about the trajectory of US fiscal policy, with Treasury Secretary Scott Bessent's apparent shift in stance on the issue adding to the negative sentiment. While specific dollar pairs are not mentioned, the greenback is likely to face broad-based pressure against major counterparts like the euro, yen, and pound. Immediate support for the dollar index (DXY) is seen at the 101.80 level, with a break below potentially accelerating losses. However, the US currency's status as a safe haven could limit the downside if risk aversion intensifies. Traders will closely watch comments from US officials and any signs of a change in fiscal policy direction for further cues.