Weak UK data stings sterling, euro hits all-time high
Sterling slipped to a record low against the euro on Monday, extending its losing streak after figures showed that British house prices fell for the sixth straight month in March.
Housing market research company Hometrack on Monday said they fell by 0.2 percent this month to stand just 0.4 percent higher from a year ago, offering more evidence that the British economy is struggling.
Along with slowing British service sector growth, the data kept traders dumping the pound on the final day of the first quarter, keeping it under pressure after the Bank of England last week emphasised that sterling may fall further.
"The weakness that everyone has been expecting from the UK economy is likely to become more clear now," said Paul Robinson, chief sterling strategist at Barclays Capital.
"The general mood is that people don't like sterling at the moment."
He added that a raft of British data this week, including those on PMI, consumer credit and housing would probably provide a clearer picture of how much the economy is weakening.
The euro hit an all-time high of 79.73 pence , taking its year-to-date gains to more than 8 percent. At 1522 GMT, it was at 79.60 pence, up 0.5 percent.
Sterling fell 0.2 percent to $1.9920, and hit an 11-year trough on the Bank of England's trade weighted measure at 92.60.
Bank of England Governor Mervyn King said on Monday that the central bank was facing the challenge of balancing the possibility of weaker growth due to the credit crunch, with higher inflation pressures, which the BoE believes will be temporary.
Many in the market expect this may prompt the BoE to cut interest rates from 5.25 percent in April after trimming them in February, which would further erode sterling's rate advantage against the euro.
Sourced by Reuters.