By Natsuko Waki
LONDON, July 26 (Reuters) - The dollar fell across the board on Tuesday after U.S. President Barack Obama gave no sign of a swift breakthrough in deadlocked talks to raise the U.S. debt ceiling, while stocks put in mixed performance with focus on earnings.
Unless lawmakers reach a deal to raise the $14.3 trillion ceiling by Aug. 2, the United States faces a technical default on some of its $9.6 trillion government bonds outstanding.
In a televised address, Obama warned that this would be a "reckless and irresponsible outcome," but he gave no indication that a compromise was imminent.
However, investors so far appear to have done little to prepare for a default or a cut in the triple-A credit rating.
On the one hand they believe lawmakers will eventually reach a deal. On the other, it is nearly impossible to insure themselves against what is considered a low-probability event, especially given the lack of alternatives and the depth of the market.
"Investors remain anxious but are still relatively patient," said Felix Parmantier, analyst at Close Brothers Seydler.
MSCI world equity index rose 0.5 percent while European stocks fell 0.2 percent after weaker-than-expected results from BP and UBS . Emerging stocks rose 0.8 percent.
U.S. stock futures were unchanged for the day
A recent run of strong U.S. corporate results is providing support in otherwise jittery trading. Of the 154 S&P 500 companies that have reported earnings so far, 75 percent have beaten analyst expectations, according to Thomson Reuters data.
U.S. crude oil
Bund futures
The dollar fell 0.6 percent against a basket of major currencies. Benchmark 10-year U.S. Treasury yields rose half a basis point to 3.01 percent .
A default could potentially spark a shift of billions of capital currently parked in Treasuries into other triple-A rated securities, triggering a sharp decline in an already weak dollar.
The U.S. currency hit a record low against the Swiss franc and fell to a four-month low near 77.90 yen , approaching a record low of 76.25.
"People are so used to using the dollar, it being at the heart of everything, that they're unlikely to change what they do (in Treasuries)," said Lloyds Bank strategist Charles Diebel.
"But if bank funding costs rise or (a large fund) says they won't buy Treasuries anymore then you could see a significant spike in yields."
The cost of insuring the United States against default stood at 57.3 basis points , nearly half the March 2009 peak.
The CDS curve is nearly flat with one-year CDS at 57.7 bps. This in itself reflects investor jitters, but it is not the kind of pricing for a market that expects an imminent default.
The euro rose 0.6 percent to $1.4469. (Additional reporting by Josie Cox; Editing by Hugh Lawson)