LONDON, Aug 22: The euro fell against the dollar on Tuesday after a key confidence index in Germany, Europe’s biggest economy, slumped to its lowest level in more than five years, analysts said.

In late European trading, the euro slipped to $1.2807 from $1.2892 late in New York on Monday.

The dollar rose to 116.61 yen, from 115.86 yen on Monday.

Analysts attributed the fall of the euro to an economic expectations index from Germany's ZEW economic research institute, which fell by 20.7 points to minus 5.6 points in August.

The drop in confidence was because of the strength of the euro, high oil prices and the anticipated hike in German value-added tax (VAT) next year, the survey showed.

“Overall, the outcome will be taken as bad news for the euro but for now we do not expect it to result in a significant paring back in ECB rate hike expectations,” said Mitul Kotecha, head of global foreign exchange research at Calyon in London.

The European Central Bank has made clear its intention to continue to gradually raise its key interest rates as the economic recovery in Europe gathers pace.

On the London Bullion Market, the price of an ounce of gold fell to $622.75 per ounce, from $625 late on Monday.—AFP