The credit rating agency Moody's cut its outlook on China’s sovereign credit rating to negative on Tuesday, citing the increasing risks to growth and a property sector crisis in the world’s second-largest economy, per Reuters. 

Moody's downgraded China's A1 debt rating to "negative" from "stable" less than a month after lowering the US' remaining triple-A grade from a credit rating agency. This development sends a warning to lenders that the likelihood of a default has grown over the last year.

Market reaction

At the time of press, the AUD/USD pair was up 0.01% on the day at 0.6554.