Moody’s Upgrades US Credit Outlook

Ratings agency Moody’s has upgraded its outlook for the US credit rating, citing a declining budget deficit.

The agency lifted its outlook to stable from negative, as it affirmed the country’s AAA rating.

It said the US economy was growing at a “faster rate compared with several AAA” peers and has demonstrated a “degree of resilience” to major reductions in the growth of government spending.

It added it expected the deficit to shrink further in the next few years.

According to the Congressional Budget Office, the budget deficit for the 2013 financial year is likely to decline to 4% of gross domestic product (GDP), down from 7% in 2012.

Moody’s said the decline was greater than the fall it had anticipated when it cut the outlook on US rating to negative from stable in 2011.

The agency added that growth forecasts for the US economy for the next few years were “close to the long-term average for the decades before the financial crisis”.

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza