Chinese rating agency cuts US credit rating

FXstreet.com (Barcelona) - The Chinese rating agency Dagong announced on Thursday its decision to lower the US sovereign debt rating by one notch to A-, from A, leaving it on negative outlook. The agency explained in the official statement that the downgrade was motivated by the concerns over the country's ability to deal with the debt crisis and with the damage done to the US economy due to the prolonged government shutdown.

"Hence the US government is still approaching the verge of default crisis, a situation that cannot be substantially alleviated in the foreseeable future," Dagong said in the statement.

Even though Dagong's rating actions do not have equal significance to those announced by Fitch, Moody's or Standard & Poor's, todays decision has more of a symbolic meaning, as Reuters points out. There are also rumors that Fitch might follow in Dagong's footsteps shortly.