LONDON (AFP) — The European single currency fell against the dollar on Thursday, retreating further from this week’s record high after a disappointing survey on business confidence in Germany, analysts said.

In early European trading, the European single currency fell to 1.5749 dollars, from 1.5882 in New York late on Wednesday. It had struck a lifetime pinnacle of 1.6019 on Tuesday.

Against the Japanese currency on Thursday, the dollar rose to 103.80 yen from 103.51.

The foreign exchange market was to focus on US new home sales and durable goods orders for March later in the day.

German business confidence posted a steeper-than-expected decline in April, a closely watched survey showed on Thursday, pointing to new pessimism in Europe’s biggest economy.

The business climate index, calculated each month by the Munich-based economic research institute Ifo, dropped to 102.4 points.

“April’s drop in the German Ifo business climate index suggests that the economy’s recent resilience to the global slowdown and the strength of the euro is beginning to wane,” said analyst Jennifer McKeown at Capital Economics.

Economists polled by Thomson Financial News had forecast the index would fall to 104.3 after unexpectedly rising to 104.8 in March, weighed down by an economic slowdown and the strong euro.

ING analyst Carsten Brzeski added: “With a further deterioration of the growth outlook for Germany and the euro zone, we expect ECB (European Central Bank) rate cuts in the second half of the year.”

The euro was already under pressure after French central bank chief Christian Noyer had said on Wednesday that eurozone interest rates could “move in both directions.”

The single currency had risen on Tuesday after Noyer, who is also a member of the ECB governing council, said that the bank was ready to move on rates if necessary and aimed to bring inflation back below 2.0 percent next year.

Speculators had taken the remarks as a hint at a possible ECB rate rise, and the euro, powered by fresh fears for the health of the US economy, broke through the 1.60-dollar threshold for the first time on Tuesday.

Weak eurozone manufacturing figures also weighed on the single currency after the purchasing managers index fell to 50.8 in April, the lowest since August 2005 and close to the sub-50 level that signals a contraction.

Even so, some market watchers believe an ECB interest rate hike remains likely because of elevated inflationary pressures.

The greenback was supported by renewed confidence on Wall Street where stocks rebounded on Wednesday on robust earnings news from Boeing and as two big US insurance firms announced merger plans.

In London on Thursday, the euro changed hands at 1.5749 dollars against 1.5882 late on Wednesday, at 163.51 yen (164.42), 0.7967 pounds (0.8022) and 1.6132 Swiss francs (1.6139).

The dollar stood at 103.80 yen (103.51) and 1.0247 Swiss francs (1.0162).

The pound was at 1.9763 dollars (1.9797).

On the London Bullion Market, the price of gold firmed to 899.14 dollars per ounce from 898.50 dollars late on Wednesday.