By: Barbara Zigah

With politics still the name of the game in the United States, the U.S. Dollar earlier hit a record low against the safe haven Swiss Franc, as well as a 4-month low against the Japanese Yen in Asian trading. In spite of Barack Obama’s calls for unity and compromise so that the debt ceiling debate could finally be resolved, markets are uncertain that a default can be averted at this late hour. As reported at 12:52 p.m. (JST) in Tokyo, the U.S. Dollar fell to a low of 0.8005 Swiss Francs before recovering to 0.8010 Swiss Francs, still a decline of 0.6%. Against the Japanese Yen, the greenback slipped to 78.11 Yen, a drop of 0.2%; earlier, on the EBS trading platform, the pair had struck a 4-month low of 77.883 Yen.

Even as the August 2nd deadline approaches, markets get the impression that the President and Congress are no closer to a compromise budget than they were earlier in the month. Markets are clearly disappointed with the government’s lack of progress and seeming indifference to a potential debt default, despite rhetoric to the contrary. One trader in Australia is forecasting market panic as the U.S. government hurtles toward the debt deadline.