Sterling eases on more bad news from housing sector
Sterling edged down towards a record low versus the euro on Wednesday after data showed British house prices fell in December at their fastest pace since the recession of the early 1990s.
The report, from the Royal Institution of Chartered Surveyors, hardened expectations that the Bank of England will follow up last month's rate cut with further monetary easing in a bid to prop up a slowing economy.
"I think everyone is well aware that the housing market is going to struggle for a bit ... But I think we may have seen the majority of the decline (in sterling), against the euro at least," said Adrian Schmidt, currency strategist at RBS Global Banking.
"There is already a fair amount of monetary policy easing priced in -- another 125 basis points from here by December. And I think sterling, having fallen 5 percent trade weighted in the last month, is less vulnerable than it was."
By 0811 GMT, the euro was at 75.54 pence, up 0.15 percent on the day but off Tuesday's record high of 76.13 pence.
The pound was down 0.2 percent at $1.9592, edging back towards last week's 10-month trough of $1.9482.
It set fresh 1-1/2 year lows at 207.60 yen as worries about a sharp U.S. slowdown and weaker equity markets weighed on risk appetite to the benefit of the Japanese unit.
Further evidence of UK consumers tightening their belts came as Britain's biggest pubs company, Punch Taverns, said trading over the Christmas period was subdued while sweets-to-DVDs retailer Woolworths described the period as "very challenging".
Investors will be looking for any signs of the economic slowdown filtering into the labour market, with UK jobs data due at 0930 GMT. Average earnings figures will also be watched as worries about inflationary pressures are a key factor which could deter the BoE from cutting rates.
Sourced by Reuters.