Investors selling dollars as debt fracas continues

The dollar is falling as US politicians remain divided on how to raise the government's ability to borrow, with a key deadline a week away.

The federal government is at risk of default after August 2 if lawmakers haven't agreed on how to raise the debt ceiling.

Analysts say a default could send stocks plunging and interest rates soaring, further damaging the weak economic recovery.

In morning trading Tuesday in New York, the dollar is weakening against the euro, British pound and Japanese yen. The euro touched above $1.45 for the first time since July 5, while the dollar fell below 78 yen for the first time since mid-March.

The world's major central banks had intervened to weaken the yen in March because of its steep rise.