The U.S. Dollar (DXY) saw a sharp fall on Monday after ratings agency Moody’s decided to strip the U.S. of its last remaining top-tier credit score, raising fears of America’s rising debt burden.  The greenback was last down 0.

The dollar slipped again Tuesday, weighed down by the Federal Reserve’s caution over the economy while traders considered news of upcoming U.S.-Japan talks.

The dollar traded sideways on Tuesday after having glided lower for a week, hemmed in by the Fed's caution over the economy and as U.S. lawmakers came closer to passing a bill expected to widen the nation's fiscal deficit.

Gold prices fell as the dollar dropped and safe-haven demand returned after Moody's downgraded the U.S. government's credit rating due to ballooning debt and deficits.

After recovering from an initial jolt, U.S. stocks drifted through quiet trading following the latest reminder that the U.S government may be hurtling toward an unsustainable mountain of debt.

The yield on both 10 and 30-year government bonds rose on Monday after another credit ratings agency downgraded the US on Friday.

That legislation, which the Congressional Budget Office estimated will add $4.5 trillion to the deficit through 2034, proved to be the final straw for Moody’s. The credit agency had previously kept the U.S. in its top rung of borrowers since it first issued ratings for government bonds in 1919.

Treasury yields fall and the dollar is little changed as Monday's "Sell America" trade recedes a bit. Concerns about the U.S. government debt flared up after the Moody's downgrade and the progress of a tax bill in Congress that looks poised to widen the already worrisome budget hole.