The UK's currency has fallen following data which showed that mortgage approvals for March dropped to their lowest levels in a year.

Over the past 24 hours, sterling traded between $1.9871 and $1.9998, closing yesterday at $1.9895. Meanwhile, the euro climbed above $1.3600 to close at $1.3597.

Mortgage approvals in the UK fell to 113,000 from 117,000 in February, figures from the Bank of England showed.

Last month, the currency soared to $2. Despite this, analysts are forecasting continued interest in the sterling.

Simon Derrick, head of currency research at Bank of New York, told Reuters: "Is sterling going to remain an attractive option for reserve managers? The answer is yes - the demand for sterling even at $2 is going to remain high."

Factors believed to have been driving the currency's rally include positive merger and acquisition flows and an encouraging interest rate outlook, Reuters states.

Steve Pearson, HBOS head of currency, told the news provider that the sterling may continue to trade around the $2 mark "for a period of time" thanks to an unrelenting pace of accumulation.