The dollar slid against the Swiss franc and the Japanese yen Monday after congressional leaders failed to reach a deal to raise the U.S. debt limit over the weekend, according to AP. Investors consider the franc and yen to be safe-haven currencies and they tend to rise when investors fear financial crises, during periods of geopolitical tension and when there are renewed concerns about slowing global growth. U.S. lawmakers couldn't come up with a deal to raise the $14.3 trillion borrowing limit. The federal government is at risk of default after Aug. 2 if a debt ceiling agreement can't be reached by then. A default could significantly hurt the dollar and financial markets, and the U.S. would likely lose its first-rate triple-A credit rating. Reaching a significant deal by next week continues to seem unlikely, said GTF currency analyst Kathy Lien in a research note. But she said the chance of a short-term increase in the debt limit has "risen significantly." "No one wants to kill the whole credibility of the U.S. government," said Lien. The dollar fell to a record low of 0.8018 Swiss franc on Monday, later inching up to 0.8057. On Friday, the dollar was worth 0.8181 Swiss franc. Meanwhile, the dollar dropped to 78.25 Japanese yen from 78.43 Japanese yen. The yen is approaching its low from March, when major central banks acted together to weaken the yen. The Japanese currency had surged in the aftermath of the disastrous earthquake and tsunami in Japan that sparked a rush for safety. The dollar also slipped against the euro Monday, even after credit ratings agency Moody's further downgraded Greece's bond ratings. Moody's warned that the country will most likely be considered to be in default after last week's new bailout package was approved. But Moody's added that the new aid deal and European officials' expanded powers will likely help stabilize Greece's debt situation and has helped contain the crisis from spreading throughout Europe. The International Monetary Fund and the eurozone countries agreed Thursday to give Greece a second bailout worth $155 billion, out of fear that a disorderly default on its debt could trigger a banking crisis and send Spanish and Italian borrowing costs soaring to unsustainable levels. Greece was granted its first bailout, worth about $159 billion, last year. The euro edged up to $1.4380 Monday from $1.4368 late Friday. The British pound dipped to $1.6299 from $1.6308, while the dollar fell to 94.53 Canadian cents from 94.92 Canadian cents.
