The experts of Bank of America Merrill Lynch say that the other US rating agencies may follow the example of Standard & Poor's and downgrade the US credit rating at the very end of 2011. The gloomy forecast is conditioned by concerns over the USA’s huge budget deficit and public debt.
Everything depends on whether the previously formed “super committee” resolves the situation until Now 23rd 2011 and to work out an efficient plan to reduce the country’s budget deficit by at least $1.2 trillion. If there is no solution, the raters will have to reconsider the USA’s sovereign rating in late Nov – early Dec 2011.
The forecast for the pace of the US economic growth in 2012 and 2013 is also cut down to 1.8% and 1.4% correspondingly.
Despite all the mentioned factors, it is too early to make conclusions. The US presidential elections are still ahead. Moreover, the tax-rebate period will be over in late 2012.
Meanwhile, according to the Department of Masterforex-V Trading System , the USD index is forming a new “short” upswing. 78,42 is the closest target. After the price hits the level, it will most likely retrace from it. It is too early to speak about a change of trend until the price breaks the MF pivot and sloping channel (as shown below):
