The USD seems to have entered the grip of a bear phase amid concerns about the U.S. AAA rating, fueled by the S&P warning for the U.K. and comments from PIMCO’s Bill Gross. Successful bond fund manager Gross blamed the sell-off in U.S. bonds, stocks and the dollar on jitters surrounding the U.S. potentially losing its AAA debt rating. Certainly the S&P “negative outlook” missive on the U.K. struck a chord with investors in the U.S. among other factors, not the least of which is the corollary of bottomless Treasury supply and Geithner’s comments about the deteriorating fiscal position and importance of a strong dollar. Moody’s affirmed yesterday that it was happy with its AAA rating of the U.S., but PIMCO’s Gross said that the U.S. will face a downgrade in “at least three to four years, if that, but the market will recognize the problems before the rating services.” Elsewhere, Japanese finance minister Yosano implied in remarks that there was little chance of intervention in FX, which provided the green flag for USD/JPY to make a fresh trend low. Perhaps Yosano is attempting to set a bear trap? Ahead, a quiet calendar looms. Both the U.K. and U.S. markets are going into a long weekend.