US dollar advanced further after US credit rating revision

On Monday US dollar extended gains against its major peers after ratings agency Standard & Poor’s revised the long-term outlook on credit rating of the United States from negative to stable.

USD/JPY pair climbed to 99.13 during the early US trade, adding 1.66% for the day.

Standard & Poor’s increased its outlook, regarding US economic development, due to concerns that short-term outlook decrease had one-in-three probability. What is more, risks US credit rating to drop from its current level AA+ have diminished. Additionally, economic outlook was improving and the currency remained strong, ratings agency added as explanation of its decision. S&P lowered US credit rating to AA+ in August 2011 because of political disputes and falling behing fiscal consolidation.

Japanese yen lost positions on Monday due to strong performance of domestic shares overnight. In addition, Bank of Japan’s policy meeting tomorrow was in investors focus, as it did not introduce any change in monetary policy last month. Earlier today official data showed that the Final Gross Domestic Product (GDP) of Japan rose by 1.0% during Q1 2013, compared to Q4 2012, above preliminary estimates of a 0.9% rise.

US credit rating revision influenced the EUR/USD pair as well, with US dollar pushing higher versus the euro to 1.3199.

The dollar was higher against the British pound and the Swiss franc, as GBP/USD slid to 1.5534, losing 0.10% for the day, and USD/CHF added 0.29% to 0.9385.

A report showed that Swiss Retail Sales increased by 3.3% during April on annual basis, exceeding projections of a 2.5% rise, while revised data during the previous period showed a 0.8% drop. In addition, a separate report said that Unemployment Rate in Switzerland ticked down to 3.0% during May from 3.1% during April.

Meanwhile, the dollar index, which gauges the performance of the US dollar versus a basket of six other major currencies, climbed 0.35% to 82.22.