Dollar declines as new data shows US growth slowing down

THE dollar tumbled yesterday after a survey showed prices at the US factory gate slipped in July, reinforcing a view that the Federal Reserve may not need to raise interest rates further to combat inflation.

The dollar fell sharply after the core US producer price index (PPI) stripping out volatile food and energy prices fell 0.3% in July, the first monthly decline since last October and well below a 0.2% rise expected by economists.

Adding to the dollar’s woes, a separate survey from the New York Federal Reserve showed that manufacturing activity in August slowed to its weakest since June 2005.