By Deborah Levine and William L. Watts, MarketWatch
SAN FRANCISCO (MarketWatch) — The dollar fell against a wide range of currencies Tuesday, touching a record low against the Swiss franc and approaching a recent low versus the Japanese yen. The bearish dollar sentiment helped the euro regain the $1.45-level.
Selling in the U.S. curency came after back-to-back speeches late Monday by President Barack Obama and House Speaker John Boehner revealed no progress toward a deal crucial to raising the U.S. debt ceiling and preventing a default.
“If the two sides remain apart by end of business ... today, negative sentiment toward the dollar may turn into a true panic triggering much larger liquidation moves,” said Boris Schlossberg, director of currency research at GFT.
The dollar index DXY -0.67% , which tracks the U.S. unit’s performance against a basket of six other currencies, fell to 73.561, down from 74.074 late Monday.
The euro EURUSD +0.82% rose to $1.4508, off the session’s best level of $1.4522 but up sharply from $1.4379 in late North American trading Monday. See real-time currency quotes and tools.
Speaking from the White House Monday evening, Obama urged congressional leaders to agree on a “fair compromise” for cutting the federal deficit and raising the debt ceiling in “the next few days.”
Minutes later, Speaker John Boehner urged support for a Republican plan to end the debt stalemate, with a prospective U.S. default now just a week away. Read more on Obama and Boehner.
“Despite the high probability that a U.S. default would drive the world economy back into recession, it appears instead as if investors are focusing on the negative implications for the dollar amid the potential global economic recovery in the second half of 2011,” said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.
Safe-haven currencies feed off weak dollar sentiment
Against the yen, the dollar USDJPY -0.32% stood at ¥78.05, down from ¥78.24 late Monday. The rise put the yen on track for levels not seen since the aftermath of the devastating earthquake and tsunami last March.
The dollar also changed hands at 80.23 centimes versus the Swiss franc USDCHF -0.43% , down 0.4% from Monday. There are 100 centimes in a Swiss franc.
The franc and the yen have long been considered the alternative currencies of choice when investors want to move into a safe haven and out of riskier assets. For its part, the dollar has played that role less frequently in recent months.
The greenback hit an all-time low versus the Swissie at 79.96 centimes in the wake of the speeches by Boehner and Obama. Read Forex Files column on the Swiss franc and turmoil in Europe and the United States.
Also Tuesay, the Australian dollar AUDUSD +0.93% rose to $1.0953, up from $1.0854.
The greenback fell 0.3% against its Canadian counterpart USDCAD -0.29% as well as the New Zealand dollar NZDUSD +0.77% . Read about possible dollar recovery against commodity and emerging-market currencies.
Dollar gets no help from confidence data
Even news that the Conference Board’s consumer-confidence index rose to 59.5 in July from 57.6 in June couldn’t stir buying interest the dollar earlier Tuesday. Read details on July consumer confidence index
“Beating expectations by a wide margin, consumer confidence in July provides further confirmation that the ‘soft patch’ following the Japanese tsunami disaster has ended. That said, growth expectations remained subdued and market confidence low as the debt-ceiling crisis continues to grind forward toward the Aug. 2 deadline,” said Michael Woolfolk, managing director of BNY Mellon Global Markets.
The British pound GBPUSD +0.70% rose to $1.6391 from $1.6296 late Monday.
The U.K.’s Office for National Statistics said the economy grew 0.2% in the second quarter from the first three months of the year. Read more on U.K. GDP.
“The difficult economic conditions that persist are more likely to keep the Bank of England on hold for quite some time,” Brown Brothers Harriman analysts said.
Deborah Levine is a MarketWatch reporter, based in New York.
William L. Watts is a reporter for MarketWatch in Frankfurt. Lisa Twaronite in Tokyo contributed to this report.
