credit rating fitch

 

The downgrade by the rating agency Fitch weighed on the US dollar, with which gold is usually negatively correlated. Late on Tuesday, it became the second rating agency after Standard & Poor's to downgrade the USA's creditworthiness. The rating was downgraded from AAA to AA+. The reason given for the step was the probable deterioration in the budget situation over the next three years and the repeatedly difficult negotiations on raising the debt ceiling.

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credit rating fitch

Fitch Ratings is one of the "Big Three" credit rating agencies, along with Moody's and Standard & Poor's. They assign credit ratings to companies, governments, and other entities to help investors assess the risk of lending or investing in them.

Fitch's credit rating scale ranges from AAA (the highest rating) to D (default). The ratings are based on a number of factors, including the entity's financial strength, profitability, and management.

Here is a brief explanation of the different credit ratings that Fitch assigns:

• AAA: This is the highest rating that Fitch assigns. It indicates that the entity is highly likely to meet its financial obligations.

• AA: This rating is also considered to be very strong. It indicates that the entity is very likely to meet its financial obligations.

• A: This rating is considered to be strong. It indicates that the entity is likely to meet its financial obligations.

• BBB: This rating is considered to be good. It indicates that the entity is reasonably likely to meet its financial obligations.

• BB: This rating is considered to be speculative. It indicates that the entity is more likely than not to meet its financial obligations.

• B: This rating is considered to be highly speculative. It indicates that the entity is more likely than not to default on its financial obligations.

• CCC: This rating is considered to be very highly speculative. It indicates that the entity is likely to default on its financial obligations.

• DD: This rating indicates that the entity is in default on its financial obligations.

• D: This rating indicates that the entity is in default on its financial obligations and is unlikely to recover.

Fitch's credit ratings are used by investors to make informed decisions about where to invest their money. The higher the rating, the lower the risk of default. Investors typically prefer to invest in entities with high credit ratings, as they are less likely to default on their financial obligations.

Fitch's credit ratings are also used by banks and other lenders to determine the interest rates that they charge borrowers. Borrowers with higher credit ratings are typically charged lower interest rates, as they are considered to be less risky.