Dollar slumps, gold soars on US economic woes

NEW YORK, Aug 3, 2011 (AFP) - The dollar fell against the euro and the yen on Wednesday as gold hit a new record high following more gloomy data on the state of the US economy.

The dollar was trading at $1.4318 against the euro in New York at 2100 GMT, compared to $1.4202 at the same time on Tuesday.

AFP - Traders take breaks outside the New York Stock Exchange August 3, 2011 in New York

The greenback also weakened against the Japanese yen, falling to 76.97 yen from 77.14 on Tuesday.

Gold, a traditional safe-haven asset, jumped to another record, hitting an intraday peak of $1,672.80 per troy ounce in New York.

The dollar slid after the release of a report which suggested that the giant US service sector -- a key employer -- was stalling, the latest in a series of negative reports on the world's largest economy.

The Institute for Supply Management said its index of non-manufacturing activity fell to 52.7 in July, below analysts' forecasts. A level of 50 indicates no growth.

"As the service sector accounts for more than 80 percent of the US economy, this decline presented more potential risks to the vitality of the dollar," said Boris Schlossberg, director of currency research at GFT.

The greenback gained against the Swiss franc, a popular safe haven in recent months, after Switzerland's central bank pledged to curb the rise of the currency. The dollar rose to 0.7692 francs from 0.7646 a day earlier.

The dollar fell against the British pound, trading at $1.6422 against the pound on Wednesday, compared to $1.6298 on Tuesday.

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