April 15, 2025 – London: European credit rating agency Scope Ratings has issued a cautionary note regarding the United States’ credit standing, highlighting that an extended trade conflict, particularly under President Donald Trump’s administration, could erode global confidence in the U.S. dollar and potentially lead to a credit downgrade.Reuters
Scope’s warning centers on the possibility that prolonged trade tariffs and the implementation of capital controls might prompt countries to seek alternatives to the dollar’s dominant role in global finance. Such developments could undermine the dollar’s exceptional status, which has long been a cornerstone of the U.S.’s economic strength.Reuters
The agency noted that the dollar has experienced its steepest year-to-date decline against other major currencies in over five decades. Additionally, credit default swap markets are anticipating multiple U.S. rating downgrades, reflecting growing investor concern over the nation’s fiscal trajectory.Reuters
Alvise Lennkh-Yunus, Scope’s head of sovereign ratings, emphasized that deeper trade ties between the European Union and China, coupled with Chinese economic reforms and increased EU investment, could further challenge the dollar’s status. Such shifts in global economic alliances may have long-term implications for the U.S.’s financial position.Reuters
Currently, Scope assigns the U.S. a credit rating of AA with a negative outlook, positioning it below the ratings given by S&P, Fitch, and Moody’s. The agency’s assessment underscores the potential risks to the U.S.’s creditworthiness amid evolving global economic dynamics.Investing.com+3Reuters+3Reuters+3
Source: “European rating agency Scope sends US downgrade warning”, Reuters, April 15, 2025. Read the original article
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