The dollar fell to new lows Monday against the Swiss franc and the Japanese yen, which traders tend to buy when they are seeking safety. It gained against most other major currencies, according to AP. Analysts say investors are worried about a possible downgrade of the U.S. credit rating despite an agreement between President Barack Obama and Congressional leaders to raise the debt ceiling and cut spending by trillions of dollars. If Congress passes the legislation, the government would avoid immediately defaulting on its debts. But the package of cuts won't reduce the country's debt much, said Capital Economics economist Paul Dales. "The long-term fiscal position of the U.S. remains perilous," he said. And the deal may not reduce the deficit enough to appease Standard & Poor's, said Barclays foreign exchange analyst Sara Yates. The credit ratings agency had warned that it might cut the U.S. government's top-notch AAA rating. "Investors are sitting at the edge of their seats waiting to see how rating agencies will respond," wrote Kathy Lien of foreign exchange brokerage GFT. Meanwhile a report from the Institute for Supply Management, a trade group, raised worries about the strength of the U.S. economy. Its purchasing managers' index slid to 50.9, the weakest level since July 2009. The reading was barely above the 50 mark that indicates growth, and suggests that the sluggish pace of economic growth in the first half of the year could continue into the fall. Early Monday, the dollar touched a post-World War II low of 76.27 yen and struck a record low of 0.7729 Swiss franc. By late Monday, the dollar was worth 77.07 Japanese yen down from 77.10 Friday and the dollar was worth 0.7816 Swiss franc, down from 0.7884 Swiss franc Friday. The dollar is down about 6 percent against the yen and 21 percent against the Swiss franc this year. Traders consider the yen, franc and dollar to be safer bets, even though the dollar's debt woes have made it less appealing. The three currencies tend to rise when investors are nervous about a slowdown in global growth or a crisis. So even though investors worried about the U.S. economy and financial stability, the dollar still rose against most of the world's other currencies. In late trading the euro dropped to $1.4265 from $1.4368, and the British pound fell to $1.6296 from $1.6431. The dollar rose to 95.65 Canadian cents from 95.54 Canadian cents and was higher versus the Australian dollar, the Scandinavian currencies and emerging-market currencies such as the Hungarian forint, Mexican peso and Brazilian real.
