The pound fell to a three-week low versus the dollar after a gauge of U.K. house prices declined in December, fueling speculation the economic recovery is losing momentum.
Sterling weakened for the first time in three days versus the euro as Citigroup Inc.’s economic surprise index for the U.K. slid to a six-week low. The gauge has been below zero for four days, signaling data has been falling short of analyst’s forecasts. U.K. government bonds advanced as demand increased at a sale of 30-year gilts.
“Positive momentum in U.K. data seems to be slowing,” said Ian Stannard, head of European foreign-exchange strategy at Morgan Stanley in London. “We’ve even seen it in the housing data overnight. We’re looking for a bigger move down in the pound to the $1.6120 area over the next few weeks.”
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