NZD strengthens as US credit rating downgrade weighs on USD

The New Zealand dollar has surged against the US dollar, with NZD/USD climbing 0.8% to 0.6320 following a downgrade to the United States' credit rating. The move by a major credit agency reflects concerns over the country's fiscal trajectory and could exert further pressure on the greenback in the near term. Consequently, the US Dollar Index has slipped 0.5% to 102.80. The downgrade may also influence US Treasury yields, with the 10-year yield currently at 3.55% and the 30-year yield at 3.82%. As market participants digest the implications of the rating action, the NZD could extend gains against the USD. However, traders should monitor upcoming US economic data and Federal Reserve commentary for any shifts in sentiment. NZD/USD now faces resistance at 0.6350, with support at 0.6280.