Debt Woes Cripple Dollar As Congress Nears Deadline
The dollar fell to a record low against the Swiss franc on Tuesday, as traders flooded into safe haven assets due to concerns that the U.S. may default on its debt next week.
If Congress fails to raise the nation’s debt limit by an August 2 deadline, the U.S. will likely lose its AAA credit rating, setting off a chain of events that may threaten the fragile economy recovery.
Data showing an uptick in American consumer confidence helped the dollar steady by mid-day.
The dollar was nearly 6 cents below par versus its Canadian counterpart, the lowest in three years. A record low of CHF 0.7997 was set against the Swiss franc.
The buck dropped to a 3-week low of $1.4521 against the euro, and to a monthly low of $1.64 versus the British pound.
With consumers’ outlook for the next six months seeing a moderate improvement in the month of July, the Conference Board released a report on Tuesday showing an unexpected increase in consumer confidence for the month.
The Conference Board said its consumer confidence index rose to 59.5 in July from a downwardly revised 57.6 in June.
The British economy expanded at a slower pace as estimated for the second quarter, the Office for National Statistics said Tuesday.
U.K. Gross Domestic Product (GDP) grew 0.2 percent sequentially in the second quarter, following an increase of 0.5 percent in the first quarter.
