Dollar Falls to Record Versus Franc as U.S. Struggles With Debt Deadlock

The dollar fell against all of its major counterparts as politicians struggled to agree on raising the U.S. debt limit and reducing its deficit.

The greenback slid below 78 yen for the first time since March and fell to a record versus the Swiss franc on concern America may default and face a reduction in its credit rating. The pound rallied from a two-week low against the euro after the U.K.’s economic growth matched forecasts. Sweden’s currency gained as producer prices increased.

“Clearly the debt ceiling debate is weighing on the U.S. dollar, and it’s causing widespread weakness across a range of crosses,” said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. “The dominant theme is the U.S. dollar and the apparent stalemate in terms of raising the debt ceiling.”

The dollar fell 0.3 percent to 78.07 yen at 10:02 a.m. in New York, from 78.29 yesterday, after sliding to 77.90, the lowest level since March 17. The greenback dropped 0.4 percent to 80.29 Swiss centimes after touching the all-time low of 79.98. The dollar slid 0.6 percent to $1.4468 versus the euro after reaching $1.4522, the weakest since July 5.

Sterling erased its drop versus the 17-nation euro, trading at 88.32 pence on a sign of economic resilience. The pound earlier slid to 88.84 pence, the weakest level since July 11.