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U.S. debt default to challenge, or enhance, dollar as safe haven: analysts

Greenback uncertainty may provide strength to yen

Under the leadership of Speaker Kevin McCarthy, House Republicans are refusing to raise the debt limit unless the White House agrees to massive budget cuts.   © Reuters

NEW YORK -- The U.S. may be only a few weeks away from defaulting on its debt over political gridlock, thrusting the global financial system into unknown territory that threatens to pummel stock prices and ignite a run on banks.

But views are mixed as to whether this would be a major blow for the dollar -- which has served as the world's major reserve currency since World War II -- or counterintuitively further enhance its safe-haven status as money flocks toward stable investments.

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