Sterling hit an 8-month low against the euro on Monday, as contrasting manufacturing growth data in Britain and in the eurozone reinforced the diverging rate outlooks that have recently kept the pound under pressure.
While Britain's manufacturing sector expanded at its weakest pace in seven months in March, manufacturing in the eurozone grew at its fastest pace in more than five years.
Sterling also traded at a three-week low against the dollar, as the Bank of England looked set to keep rates on hold at 4.5 percent at a time when both the European and US central banks have signalled further credit tightening to come.
By 1422 GMT, sterling was at 69.81 pence per euro, just off an 8-month low of 69.89 pence hit earlier. A break beyond 69.90 would take the pound to a one-year low against the single currency.
Against the dollar, sterling was down around half a percent at $1.7295, having hit a three-week low at $1.7252. A break below $1.7228 would make way for a three-month low.
"More relevant issues (for sterling) are how strong growth is elsewhere in Europe in particular and what signals we get about ECB rate hikes, if at all," said Tim Fox, currency strategist at Dresdner Kleinwort Wasserstein.
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