Dollar Falls on Slow GNP Growth

The dollar slumped against other major currencies in European trading today on news of weaker-than-expected growth in the U.S. economy.

The dollar fell after the Commerce Department reported in Washington that the gross national product grew at a sluggish annual rate of 1.2% during the second quarter.

Slow economic growth improves prospects for lower U.S. interest rates, which undermine the dollar because it cannot compete against currencies backed by higher rates.

In London, the British pound, which is supported by high interest rates, was quoted at $1.8335, up sharply from $1.8133 late Thursday. Other afternoon dollar rates, compared with late Thursday’s prices, included: 1.6150 West German marks, down from 1.6220; 1.3655 Swiss francs, down from 1.3780, and 5.4125 French francs, down from 5.4355.