Market news
02.08.2023, 08:05

Rating changes no longer have the signaling effect that could trigger violent capital flows – Commerzbank

A rating agency downgraded the US Treasury. Economists at Commerzbank analyze implications for the Dollar.

No significant Dollar reaction to rating change

A major rating agency has downgraded the US Treasury. USD exchange rates reacted, but so little that you'd better have a magnifying glass handy if you want to find the effect in the chart.

Since foreigners tend to invest in the US at relatively low risk, it is primarily US government bonds that determine the overall attractiveness of the US as an investment destination. But we are not living in the 1980s anymore. Rating changes no longer have the signaling effect that could trigger violent capital flows.

 

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