Australian dollar down on US downgrade warning

THE Australian dollar was trading lower today, as Standard & Poor's warned of a one in three chance of a further credit downgrade for the US.

THE Australian dollar was trading lower today, as Standard & Poor's warned of a one in three chance of a further credit downgrade for the US.

The ratings agency docked the United States from a sterling AAA to a AA+ rating on Friday largely because of the failure of bitterly divided US leaders to reach a consensus on containing the country's spiralling debt.

"If the fiscal position of the United States deteriorates further, or if the political gridlock becomes more entrenched, then that could lead to (another) downgrade," S&P ratings head John Chambers said yesterday.

At 6.22am (AEST), the local unit was trading at 104.20 US cents, down from 104.42 cents on Friday.