(Reuters) - The dollar fell on Thursday, sending gold to a record high and yields on Japanese government bonds to eight-month lows, after Moody's warning that the United States may lose its top-notch credit rating spurred a rush toward safe-haven assets.
A standoff in Congress over raising the country's debt ceiling while disagreements over a plan to reduce the ballooning deficit prompted the rating agency to place its Aaa rating on review for a possible downgrade for the first time since 1996.
For markets, the stalled U.S. debt talks have added to worries that Europe's sovereign debt crisis was worsening. Meantime, euro zone leaders sought to break an impasse on how and when to grant Greece urgent aid.
The risk of a lower credit rating for the U.S. overshadowed Federal Reserve Chairman Ben Bernanke's suggestion, in testimony to Congress, that the central bank could provide more stimulus if the economy weakens further.
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