Graphic: renjith krishnan

New York - The dollar Monday fell against major currencies as the US budget fight dragged on with no sign of progress.

Near 23:00 SA time, the euro traded at $1.3579 compared with $1.3557 Friday.

The dollar also sank against the yen, buying 96.68 of the Japanese currency compared with 97.46.

The euro fell against the yen, trading at 131.30 yen from 132.13.

Democratic and Republican leaders gave no ground over the weekend or on Monday as the partial US government shutdown edged into its second week.

Analysts are especially concerned that the impasse could lead to a similar paralysis ahead of the October 17 deadline to raise the debt ceiling,with potentially devastating economic consequences.

“Dollar sentiment has been in retreat mode for a while amid concerns that political brinkmanship in Washington could hurt American growth during the final quarter of the year and keep the Fed from slowing stimulus,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.

However, Manimbo said the dollar could actually strengthen with an escalation of US market anxiety because of the greenback's standing as an “elite” safe haven.

Similarly, Christopher Vecchio, a currency analyst at DailyFX, said the dollar, as a safe haven, should advance “if the October 17 deadline creeps forward without any tangible resolution in sight.”

But Vecchio said the dollar would likely trade at a discount to other safe havens, such as the Japanese yen and the Swiss franc.

The British pound rose to $1.6093 from $1.6005 Friday.

The dollar dropped to 0.9028 Swiss franc from 0.9071. - Sapa-AFP