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FXstreet.com (Barcelona) - US markets have opened Monday's session on a sharply negative tone, with risk appetite hammered after Standard & Poor's downgraded US government's outlook from "stable" to "negative". In currency markets, the Dollar has lost ground against its main rivals.

The Dow Jones Industrials Index drops 1.7% while the S&P 500 index trades 1.6% lower, and the the Nasdaq Index sheds 1.9% in the first hour of trading.

Standard & Poor's has downgraded the the outlook of US sovereign debt to "negative" from "stable", based ion concerns about the possibility of policymakers failing to reach an agreement to tackle the country's fiscal pressures.

Dollar drops across the board

The Dollar has lost ground against most of the currencies, with GBP/USD decline from 1.6385 high on Thursday, bottoming at 1.6230, to bounce up about 100 pips after S&P news, to hit 1.6330, and ease to 1.6285 shortly afterwards.

EUR/USD retreat from multi-month highs at 1.4525 last week, found buyers at 1.4265 to spike higher after S&P news, reaching 1.4350, although the pair gave away gains, with the Euro suffering from a sovereign debt crisis of its own, and dropped to 1.4250 low shortly afterwards.

USD/CHF recovery from 0.8895 low last week has been capped at 0.8990, and the pair has given away most of the gains, pulling back to 0.8905.

USD/JPY retreat from 85.50 high on early April extended below 82.65, to a fresh 3-week low at 82.50.

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