Dollar dives as markets left waiting for debt deal

The dollar touched a three week low against the euro as investors were kept waiting for signs of progress in US lawmakers' attempt to raise the debt ceiling.

A speech by US president Barack Obama last night indicating no deal was imminent pushed the dollar down against a basket of currencies, including the troubled euro.

Safe haven gold maintained this week's fresh high of $1,615 an ounce, after Obama said the debt impasse could "do serious damage" to the US economy.

The greenback 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 that last week's eurozone bailout may worsen the debt crisis and could harm the credit ratings of stronger eurozone countries.

In London the FTSE index of 100 leading stocks were up a third of a percent in early trading, at 5,942.31, ahead of second quarter growth figures out later this morning.