* Index of German business morale surpasses expectations * Sterling falls after in-line UK growth numbers * NZD up as central bank's statement seen as less dovish By Gertrude Chavez-Dreyfuss NEW YORK, July 25 (Reuters) - The dollar fell across the board on Thursday, undercut by less upbeat U.S. economic data which contrasted with positive economic reports from the euro zone and expectations of tighter monetary policy in New Zealand. Investors are cautiously looking ahead to the government's advance estimate of second-quarter U.S. gross domestic product on Wednesday. Total U.S. durable goods orders rose 4.2 percent in June, the Commerce Department said, but shipments of so-called core capital goods - used to calculate equipment and software spending in the GDP report - fell 0.9 percent last month. The drop, which followed a 1.9 percent increase in May, was a reminder of just how much economic growth in the second quarter slowed. A separate report showed U.S. initial claims for state unemployment benefits increased 7,000 to 343,000 last week, The euro, meanwhile, rose to a one-month peak against the dollar, initially bolstered by a German Ifo survey which showed business morale was slightly better than expected in July. The influential think-tank's business climate index rose to 106.2 from 105.9 in June, just beating the median 106.1 forecast. The Ifo report followed strong manufacturing data in Germany and France on Wednesday. "We have encouraging data out of the euro zone the last two days, while here in the U.S., the numbers have been inconsistent, which have weighed on the dollar," said Richard Franulovich, senior currency strategist at WestPac in New York. "The headline number on U.S. durables was good, but core shipments were weak. So overall we're looking for a softer print in the U.S. GDP number as economists have been revising their forecasts lower the last two weeks." A Reuters poll showed U.S. GDP edged up by 1.4 percent in the second quarter. In late afternoon trading, the dollar index fell 0.7 percent to 81.683, while the euro rose to $1.3295, the highest since June 20, and was last at $1.3291, up 0.7 percent. "A run of better data from Europe this week made the euro a more enticing bet and tempered bearishness ahead of next week's ECB (European Central Bank) meeting," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington. The New Zealand dollar, meanwhile, climbed to a one-month high of US$0.8100 as investors detected a more hawkish tone from the Reserve Bank of New Zealand. The New Zealand currency was last at US$0.8092, up 2.1 percent. "There was a lot more emphasis on the potential inflation spillover from construction costs and housing market," said Jane Turner, a senior economist at ASB Bank in London. "We still expect the RBNZ to first lift the official cash rate in March 2014." If that prediction proves correct, New Zealand could be the first developed nation to begin a rate tightening cycle. Sterling also swung wildly after data showed the British economy grew 0.6 percent in the second quarter compared with the previous quarter and 1.4 percent compared with the second quarter one year ago. The pound was last up 0.7 percent at $1.5415. The Bank of England is expected to issue forward guidance next month that it will keep rates low to support growth. Despite Thursday's moves, the dollar's upward trend is expected to continue. It has shown a high correlation to Treasury yields in recent weeks as the market has focused on when the Federal Reserve might start tapering its monetary stimulus. The dollar fell 1.2 percent against the yen to 99.04 yen . There are strong bids reported at the 99.04-99.00 level. The yen, however, remains the worst-performing of the 36 most actively traded currencies against the dollar year to date with a 13.6 percent drop. Some US$4.5 billion in euros changed hands on Thursday, using Reuters data, with US$2 billion in yen.