* Euro gains broadly after euro zone PMI, German Ifo data
* Sterling stumbles on weak UK 2nd quarter GDP
* Risk demand intact, some analysts doubt further big rise
* U.S. consumer confidence slips in July (Adds quotes, updates prices)
By Gertrude Chavez-Dreyfuss
NEW YORK, July 24 (Reuters) - The dollar slipped against the euro on Friday as figures showing a stabilizing euro zone economy supported expectations for a global recovery this year, stoking risk appetite.
Currencies considered to be high-risk such as the Australian and New Zealand dollars rose slightly, although they came off their highs of the day. But sterling, among currencies that typically benefit from higher risk appetite, fell after data showed the UK economy contracted at a much sharper-than-expected rate in the second quarter.
Solid corporate earnings have boosted risk trades this week, but some companies have shown weak results and a strong performance for the quarter may not point to strength in the future, some market participants said.
"Overall, risk is still positive although stocks are not as frothy as they were yesterday," said Patrick Brodie, chief dealer at Sumitomo Mitsui Banking in New York.
"There's probably not much impetus to take the yen to new lows or the euro to fresh highs. Ultimately, we'll probably see a rally in the euro above $1.43 but we're not just getting it today."
A drop in the U.S. consumer confidence index in late July to its lowest reading since April slightly dented risk sentiment, but the general mood remained upbeat, analysts said.
And data from the Bank of New York Mellon on Friday showed that risk demand remains in place despite weaker U.S. stocks, with net outflows seen in the yen and U.S. dollar. The bank's report also indicated net buying of the euro and Canadian and New Zealand dollars.
In midday New York trading, the euro rose 0.2 percent to $1.4188, after climbing as high as $1.4253, according to Reuters data. The ICE Futures' dollar index was little changed at 78.839.
The euro had gained after the Ifo German business sentiment index rose for a fourth month running to its highest level since October 2008, while initial estimates showed the euro zone services and manufacturing sectors contracted much less sharply than expected in July.
"We had the better economic data out of Europe, so we're seeing positive fundamentals overall. That's helping the euro against the dollar and supporting risk sentiment overall," said Brian Kim, currency strategist at UBS in Stamford, Connecticut.
UK gross domestic product, however, fell 0.8 percent on the quarter in April-June, for an annual decline of 5.6 percent. That was far worse than forecasts for a decline of 0.3 percent and followed a hefty 2.4 percent drop in the first quarter.
Against sterling, the euro traded 0.7 percent higher at 86.42 pence.
Analysts said the euro's rise against sterling underlined the contrast between the solid euro zone data and weak UK data. Market participants have speculated the UK economy will recover faster than the euro zone, and while that view remains intact, some said Friday's move suggested recent sterling gains on that belief may have been overdone.
Sterling fell 0.5 percent against the dollar to $1.6416, retreating from the day's high of $1.6542 as the GDP figures suggested a UK recovery could take longer than previously thought.
The dollar fell 0.3 percent against the yen to 94.71. (Editing by Leslie Adler)