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After U.S. President Barack Obama announced late last night that the U.S. legislature had finally hammered out a deal which would raise the U.S. debt ceiling and ensure that a U.S. default would not occur

With Moody’s credit agency now reviewing the country’s situation, Spain may be the next country to have its debt status downgraded, once again fueling fears of contagion and instability in the region.

Investor fears of further debt contagion in the Eurozone sent the Euro broadly lower in Asian trading today, while the U.S. Dollar was also under pressure as the debt ceiling debate rages on in Washington.

The greenback was lower against its safe-haven counterparts the Japanese Yen and Swiss Franc, but also against commodity-linked currencies such as the Australian and New Zealand Dollars, which rallied on key economic data.

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.

With the focus temporarily off of the Eurozone, investors shift their attention to the United States and the impending deadline for establishment of a new debt ceiling. As a result, the U.S. Dollar is under significant pressure on growing concerns that the policymakers there will fail to reach a deal and a debt default will ensue.

Following yesterday’s announcement by E.U. policymakers that a deal to bailout Greek debt has been worked out, the Euro continues to hold on to its gains against the U.S. Dollar.

In Asian trading yesterday the Euro strengthened 0.5%, up to $1.4288, a one-week high against the greenback. The currency’s position was solidified after a meeting of French President Nicholas Sarkozy and German Chancellor Angela Merkel.

In earlier Asian trading, the Euro continued its rally against the U.S. Dollar, given respite by yesterday’s successful Italian and Spanish bond auctions.

In late Asian trading, the Euro is holding steady against the U.S. Dollar; investors are apparently taking advantage of the lull between last Friday’s stress test results and this week’s Eurozone policymakers meeting.

Both the common currency and the U.S. Dollar have struck new record troughs against the Swiss Franc in Asian trading today, as investor concerns over sovereign debt fears on both sides of the Atlantic are weighing.

With investor focus returning to the Eurozone and the results of bank stress tests which will be released later today, the U.S. Dollar steadied in Asian trading today.

The U.S. Dollar was party to a major sell-off yesterday following the Federal Reserve Bank Chairman’s testimony to the U.S. Congress. Bernanke made it clear that the continued sluggishness of the U.S. economy could warrant further stimulus and that the Federal Reserve is ready to provide it as and when they deem it necessary.

The Euro finally got a reprieve from the beating it’s taken this week as investors flocked to the safe haven currencies in the wake of growing Eurozone concerns.

In Asian trading today, the common currency fell to a new historic low against the safe haven Swiss Franc, and a 4-month low versus the U.S. Dollar as investors worry over contagion of peripheral debt.