U.S., Britain Both face Lower Debt Credit Ratings

The U.S. dollar’s day of reckoning may be inching closer as its status as a safe-haven currency fades with every uptick in stocks and commodities and its potential risks – debt and inflation – are brought under a harsher spotlight.

Ashraf Laidi, chief market strategist at CMC Markets, said Wednesday a “serious case of dollar damage” was underway.

“We long warned about the day of reckoning for the dollar emerging at the next economic recovery,” Mr. Laidi said in a note.

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From The Times (London)

Pressure on the Chancellor to take more aggressive action to bolster government finances mounted today after public borrowing hit £8.5 billion and a leading rating agency threatened to downgrade its assessment of the country’s creditworthiness.

New official data this morning showed that the Treasury borrowed a monthly total of £8.5 billion last month – a record for any April, and more than four times the £1.8 billion that the Chancellor needed a year ago to bridge the gap between spending and revenues.

Standard & Poor’s (S&P), one of the world’s two main ratings organisation, reaffirmed that its credit rating for Britain’s government debt remained at so-called “triple A” status, a gold-plated standard that is the highest available. But S&P fired a warning shot at the Treasury when it revised its outlook on this assessment from “stable” to “negative”.

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