EUR/USD Rises Near 1.1250 as US Credit Downgrade Weighs on Dollar

EUR/USD Rises Near 1.1250 as US Credit Downgrade Weakens Dollar

EUR/USD continues to rise towards the 1.1250 level as the US Dollar remains under pressure after Moody's downgraded the US credit rating. The downgrade, which reflects concerns about the US's increasing debt burden, has led to a decline in the US Dollar Index (DXY), pushing the Greenback lower.

On Friday, Moody's downgraded the US credit rating from Aaa to Aa1, citing concerns over the growing $36 trillion US government debt and fiscal imbalances. This has raised fears that the US may face higher long-term borrowing costs, further straining the economy. The downgrade has also intensified worries over the additional $3 trillion-$5 trillion in debt expected from US President Donald Trump's proposed fiscal plans.

Meanwhile, the EU's executive branch has projected an average inflation rate of 1.7% for 2026, providing some stability amid global financial uncertainties. As a result, EUR/USD maintains its upward movement in the European session, with the Euro continuing to strengthen against the US Dollar.