RTRS: Dollar hits '09 low on rating fears; stocks dip
The dollar fell to a 2009 low on Friday as fears intensified that the United States could lose its triple-A rating, while renewed caution about the world economy and banks prompted Asian and European stocks to slip.
The dollar's latest decline started when ratings agency Standard & Poor's cut its ratings outlook on Britain to negative from stable, stoking fears other AAA-rated countries which are running huge debt levels could share a similar fate.
Moody's Investor Service said on Thursday it was comfortable with its triple-A sovereign rating on the United States but that it was not guaranteed forever.
"The main issues are related to yesterday's movement on fears that the U.S. might lose its triple-A rating," said Roberto Mialich, FX strategist at Unicredit in Milan.
"This exacerbated the dollar's losses over the last few days ... (and) for the time being it's hard to imagine a sharp reversal of the dollar's trend."
The dollar index .DXY, which measures the currency's strength against major trading partners, fell 0.3 percent to its lowest since late December, before steadying.
The index is on track for its biggest weekly drop in two months, when the Federal Reserve launched its large-scale purchases of U.S. Treasuries in late March.
Minutes of the Fed's April meeting, published this week, showed it considered buying more securities to spur recovery, a move which would inject more dollars into the market.
The FTSEurofirst 300 index .FTEU3 fell a third of a percent, led by weaker banking shares, and Japan's Nikkei closed 0.4 percent lower .N225.
"The underlying economics are beginning to move to the fore once again, following an almost euphoric run up over the past two months," said Chris Hossain, senior sales manager at ODL Securities.
MSCI world equity index was up 0.2 percent. Emerging stocks .MSCIEF rose 0.12 percent.
U.S. crude oil rose 1 percent to $61.66 a barrel, close to the previous day's six-month high above $62.
June Bund futures fell 96 ticks.
RECOVERY SIGNS
Money markets showed further signs of easing tensions.
