Euro retreats in London

The euro retreated from a record high versus the dollar on Wednesday after a fall in manufacturing activity suggested that euro zone is starting to feel the pinch of a global slowdown and a strong currency.
Investors also sold the euro after a European Central Bank official toned down his hawkish comments, cooling speculation that the ECB's next move on interest rates may be a rise, rather than a cut.
The RBC/NTC Eurozone Purchasing Managers Index for manufacturing dropped to 50.8 in April, its lowest in nearly three years. German manufacturing activity also fell, although both German and eurozone readings for the service economy rose.
"Manufacturing has dropped quite a bit and that has been the driver of growth in Germany ... the euro is off a touch on it," said David Pais, currency strategist at Citigroup. "We're a considerable way away from an ECB rate rise ... I can't see it happening, to be honest."
By 1046 GMT the euro was down 0.2 percent at $1.5960, off the record peak of $1.6018 set the previous session according to Reuters data. It hovered around 164.60 yen, off an earlier four-month high of 164.98 yen.
The US currency was steady at 103.03 yen. Sterling slipped 0.2 percent to $1.9906 while the euro hovered in reach of a record high versus the UK currency after slide in British mortgage approvals to a record low in March underlined serious weakness in the housing market.
The data suggested that the Bank of England may continue cutting rates, and wiped out initial sterling gains made on BoE minutes showing that the central bank was in three minds about its 25 basis point rate cut to 5 percent this month.
The ECB is expected to keep interest rates on hold at 4.0 percent for a while, in contrast to the US Federal Reserve, which is expected to lower interest rates from the current 2.25 percent later this month..
The euro hit a record high above $1.60 on Tuesday, boosted by hawkish remarks from ECB officials, including Governing Council member Christian Noyer's comments in an interview with French radio network RTL that the bank will do what is needed to being inflation back to target. The Australian dollar climbed to a 24-year high of $0.9541 after data showed that core inflation in Australia accelerated to its fastest pace in nearly 17 years last quarter.