* Details of U.S. durables report less favorable
* German Ifo sentiment poll hits highest in nearly 1 year
* High yielders slip as cautious stock markets head lower (Recasts, updates prices, adds quotes, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 26 (Reuters) - The dollar firmed on Wednesday, recouping losses this week, as a less-than-upbeat U.S. durables report eroded risk appetite and prompted investors to seek shelter in the safe-haven currency.
U.S. durable goods orders surged in July. But a key measure of business demand -- non-defense capital goods, excluding aircraft -- fell in July and reminded investors the U.S. economy still faces huge challenges as it tries to emerge from deep recession. See [ID:nCAT002814].
"I think this is going to kind of temper some of the enthusiasm that we saw out of the headline number," said Joe Manimbo, currency trader at Travelex Global Business Payments in Washington.
"On the surface, it looks good, but if you look a little closer, that just underscores the continued headwinds that face the U.S. economy. The dollar is getting a little bit of a boost in terms of safe-haven flows," he said.
Dollar strength could also be attributed to investors locking in gains in other currencies after declines in global equities.
High-yielding and commodity-linked currencies such as the Australian dollar fell after European equities snapped four straight sessions of gains led by commodity stocks.
Still, analysts said the broad weak dollar trend remains in place given upbeat U.S. housing and consumer confidence numbers on Tuesday and a report showing an improvement in German business morale on Wednesday.
Forecast-beating numbers have weighed on the dollar the last few weeks as investors move into other growth-sensitive currencies such as the euro, as well as the Australian and New Zealand dollars.
Despite the slight setback in the durables report, many analysts think the overall global growth theme continues.
"I think this is just a little bit of give-back from the previous sessions' gains and sort of a retracement of the overall trend of dollar weakness," said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto.
In early New York trading, the ICE Futures' dollar index
<.DXY> rose 0.3 percent to 78.459. The euro slipped 0.1 percent
to $1.4276
Earlier in the session, the euro got a brief boost after the Munich-based Ifo think tank's business climate index rose to 90.5 from an upwardly revised 87.4 in July, beating an 88.9 median forecast in a Reuters poll [ID:nLQ735962].
Against the yen, the dollar was little changed on the day
at 94.16 yen
(Additional reporting by Wanfeng Zhou in New York; Editing by Andrew Hay)