Euro backtracks as recent rally stalls

The euro fell almost half a per cent against the dollar and the yen today as the previous day's rally to five-month highs against…

The euro fell almost half a per cent against the dollar and the yen today as the previous day's rally to five-month highs against the greenback ran out of steam.

Dealers said disappointment at the euro's inability to hold above $0.92 had encouraged dealers to lock in profits. The single currency has racked up gains of around 5 per cent against the dollar in the last two weeks and around 10 per cent since early July.

News that the German economy stalled in the second quarter also sapped enthusiasm for the euro, contrasting with a survey yesterday which showed an unexpected rise in German business confidence.

The euro was trading near day's lows around $0.91 by noon, down almost half a per cent from the New York close and well over a cent from yesterday's five-month highs.