The dollar fell to a record low against the Swiss franc and a four-month trough versus the yen on Monday as a deadlock in negotiations to raise the US debt ceiling spooked the market and spurred demand for currencies viewed as safe havens. Analysts warned of further sharp selling in the dollar if Washington fails to increase the US debt limit and enters a technical default on its debt next month, a scenario for which analysts have priced in a roughly 10 percent chance.
Overall, the Swiss franc was the biggest beneficiary of the demand for safe havens, pushing the dollar to an all-time low of 0.80210 francs on trading platform EBS. The dollar has fallen in three of the last four sessions against the Swiss currency. The euro also fell versus the franc, dropping 1.7 percent. Against the yen, the dollar fell as low as 78.055 yen, its weakest level since mid-March, and was last at 78.310 yen, down 0.3 percent.