London, Aug. 9 (Bloomberg) -- The dollar dropped against the euro for the second day amid concern U.S. economic growth won't revive anytime soon. ``The belief that the U.S. economy would recover rapidly sustained the dollar -- that belief is disappearing now,'' said Mark Austin, a currency strategist at HSBC Bank. ``The euro is benefiting by default.'' A U.S. Federal Reserve survey yesterday showed slowing manufacturing had begun to stunt growth in the wider U.S. economy in June and July. The report came after recent declines in consumer confidence and weaker-than-expected corporate earnings, and triggered losses in U.S. stocks. The dollar weakened to 88.50 U.S. cents per euro from 87.85 in London late yesterday. It has lost 4 percent against the single currency so far this quarter. Against the yen, the U.S. currency rose to 123.46 yen per dollar from 123.12 yesterday. The dollar's losses against the euro also came as the European Central Bank said in its August monthly report it will ``closely monitor'' whether interest rates are appropriate, a signal it may be preparing to lower borrowing costs this month. ``If there is a ready-steady-go here, then they're at steady now,'' said Holger Fahrinkrug, an economist at UBS Warburg in Frankfurt. ``Their comments are a bit softer.''