Dollar hits new lows as markets await debt deal

The dollar has hit a record low against the Swiss franc as investors are kept waiting for signs of progress in US lawmakers' attempt to raise the debt ceiling.

A speech by US president Barack Obama indicating no deal was imminent pushed the dollar down against a basket of currencies, including the troubled euro, and saw gold maintain this week's fresh high of $1,615 an ounce.

The dollar fell to a record low of 80.06 Swiss centimes and also dipped below 78 yen, its lowest level against the Japanese currency since March, after Obama said the debt impasse could "do serious damage" to the US economy.

The currency also touched a three-week low against the euro despite fears over the strength of the eurozone's latest bailout package. Eurozone banking stocks fell sharply in trading on Monday, just days after a deal to extend the Greek bailout.

Ratings agency Moody's warned on Monday last week's bailout may worsen the debt crisis and could harm the credit ratings of stronger eurozone countries.

Bank stocks were also down in India after the central bank hiked repo rates by 50 basis points, twice as much as expected. But markets elsewhere in Asia posted strong gains as investors looked for options outside the US and were reassured by strong earnings figures.

The MSCI Asia-Pacific rose 1%, while Japan's Nikkei was up 0.5% at 10,100 as earnings figures from Canon indicated resilience in the face of the 11 March earthquake. Hong Kong's Hang Seng index was up 1.1% at 22,534.

In Europe, the Euro Stoxx 50 opened roughly flat, down 7 points at 2,547.9 in early trading. The FTSE 100 opened 17 points higher at 5,942 ahead of the release of UK Q2 GDP figures later this morning.