Sterling falls on weak housing data ahead of BoE report
The pound fell versus the dollar on Wednesday as weak UK house price data backed the view that rates are headed lower soon and on expectations that the Bank of England's inflation report would lower growth forecasts.
The closely watched forecasts, at 1030 GMT, are likely to signal a deterioration in both growth and inflation prospects, suggesting future interest rate cuts will be gradual.
But data from the UK economy continues to be downbeat keeping the focus on weak growth and upping pressure on policymakers to cut rates, undermining the pound's yield appeal.
British house prices fell at their fastest pace in at least a decade in the three months to January, a survey from the Royal Institute of Chartered Surveyors showed.
"Horrible housing numbers and the prospect of a lower growth forecast (from the Bank of England) have hit the pound," said Russell Jones head of fixed income and currencies global research at RBC Capital Markets.
"The market is of the opinion that the Bank of England will look through any inflation blip and that rates are heading lower removing support for the pound."
At 0825 GMT the pound was down 0.3 percent to $1.9552. The euro was steady at 74.35 pence.
Investors will also look to UK employment data at 0930 GMT.
The futures market is currently pricing in at least three quarter point rate cuts by the end of the year from 5.25 percent.
Sourced by Reuters.