The euro teetered half a cent above this week's seven-month low against the dollar on Wednesday amid signs of weakness in the eurozone economy. Germany's Ifo institute said business confidence fell to its lowest level in almost two years this month, while Italian data showed a decline in the business mood to its weakest since November 2001. These releases followed news on Tuesday that the Paris-based Organisation for Economic Co-operation and Development cut its growth forecasts for the eurozone and urged the European Central Bank to cut interest rates to stimulate demand.
Signs of trouble in Europe drove investors to look at the prospects of gradual increases in US interest rates and buy the dollar.
"Even though there are some concerns about US growth and there may be signs that the economy is slowing, the European economy is already slow," said Tom Vosa, analyst at National Australia Bank in London.
"And the euro is finding it difficult to hold on to any gains in an environment where growth is definitely going to be below that of the US"
The euro - which sank to a seven-month low of $1.2533 on Monday - was trading at $1.2570 at 1210 GMT, little changed from the New York close.
But the Norwegian crown extended earlier gains versus the euro, hitting its highest level since September 2003 at 8.0503 after the central bank said it had considered raising interest rates at Wednesday's meeting.
It decided to leave borrowing costs unchanged at 1.75 percent.
The dollar was holding just below a recent one-month high against the yen as some players continued to sell the Japanese currency, bought earlier as a bet on a revaluation of the Chinese yuan.
At 1215 GMT, the dollar fetched 107.68 yen, virtually steady from late New York trade and off Monday's one-month high of 108.30 yen.
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