This has nothing to do with the downgrade.
Looks like the boys got themselves caught in a bit of a dollar short squeeze.
Falling crude oil and other commodity prices will only make it worse.
The Aussie dollar looks to be down close to 10% from recent highs, indicating a bit of a $US short there too.
Seems near 0 rates, QE, and general bad mouthing of the $US may have gotten them carried away on the short side, using it as a ‘funding currency’ and all that.

Could have been worse, could have been short yen for the same reason, which they also are…

Asia Banks Face Dollar Funding Squeeze After US CutAsia Banks Face Dollar Funding Squeeze After US Cut

August 8 (Reuters) — Asia’s banks are seen facing a bump-up in dollar-funding costs and potentially slower credit growth after Standard & Poor’s historic U.S. debt rating downgrade, strengthening China’s case to push the yuan as a global alternative to the dollar.

Ratings agency S&P cut the U.S. long-term rating by one notch to AA+ from AAA on Friday, sparking a sell off in global stock markets already roiling from concerns about the euro zone’s debt crisis.

Banks in Asia have about 15-20 percent of their loan book in U.S. dollars, according to an estimate by Ismael Pili, head of Asian bank research at Macquarie Capital. Analysts said their demand and costs have been climbing.

“We have seen rising demand for U.S dollar loans by corporates throughout the region,” said Christine Kuo, Singapore-based team leader for banking at Moody’s Investor Service.

“Banks have been raising U.S. dollar funding to meet their customer demand. If there is tightening or there is great volatility in the U.S. dollar market, that’s where we think the impact will come in. Some of the banks will need to pay higher for U.S. dollar funding or they may have to delay their capital market issuance should the market become too volatile,” she added.

Moody’s estimates Singapore’s DBS and OCBC have loan-to-deposit ratios in U.S. dollar of 140-160 percent. That means they do not have sufficient U.S. dollar deposits for loans but borrow from the wholesale market to finance corporate needs.

The funding squeeze will again intensify calls for replacing the dollar as the reserve currency.