Hong Kong. Asian shares tumbled Tuesday and traders looked for safe haven assets such as gold and the yen after Standard & Poor's downgraded its US sovereign debt outlook for the first time.
The ratings agency Monday challenged Washington's gold-star "AAA"-rated standard by lowering its outlook to "negative" from "stable", warning that politicians seemed unable to agree a plan to reduce the huge budget deficit.
The move sent stocks tumbling on Wall Street and across Europe. The losses continued in Asia.
The news sent the price of gold soaring to a record $1,497.23 an ounce on the London Bullion Market as dealers looked for safer bets at a time of economic unease.
In Hong Kong it fell back slightly to open at $1,494.00-$1,495.00.
The dollar tumbled further against the Japanese currency after the downgrade, hitting 82.40 yen, from 82.68 late in New York on Monday.
"Even though the US has the world’s largest and most diversified economy as well as the world's reserve currency, she is also an enormous net borrower on the international capital markets," noted Capital Economics.
The US is "not a net lender like Japan who can draw on a huge pool of domestic savings to finance her government’s yawing fiscal deficit."
The yen also rose to 117.29 against the euro from 117.68 while the European single currency dipped to $1.4228 from $1.4235.
