Sterling falls broadly

Sterling fell broadly on Monday, hitting its lowest level in a month against the dollar as falling equities and oil prices encouraged investors to shun perceived higher risk currencies. The pound was also dented by an earlier survey showing a fall in UK house prices, highlighting concerns that the UK economy may not be recovering as well as previously hoped.
Property website Rightmove said asking prices for homes in England and Wales fell 2.2 percent month-on-month during August - more than reversing a rise in July - and by 3.1 percent year-on-year. The UK currency has come under broad pressure since the Bank of England increased asset purchases under its quantitative easing programme by more than expected earlier this month, saying Britain's downturn looked deeper than previously thought.
"The Bank of England's quantitative easing move has hit sterling quite hard and in the short term it will probably continue to do so," Standard Bank head of G10 currency research Steve Barrow said. Against the dollar, it fell more than 1.5 percent to $1.6275, its weakest since July 17 and well below a 10-month high above $1.7 hit earlier this month.
Sterling was also lower against the Japanese yen - which along with the dollar tends to gain in times of heightened risk aversion -, falling to its lowest in more than three weeks at 153.78 yen. Elsewhere, the euro gained 0.4 percent to 86.23 pence at 1456 GMT, while across-the-board losses pushed sterling's trade-weighted index as low as 82.6, its weakest since the end of July.
Analysts noted bearish technical signals for the pound, which looks set to close below its 50-day moving average against the US dollar - currently at around $1.6454 according to Reuters charts - for the first time since March. The BoE warned in its quarterly inflation report last week the British economy will take a long time to recover properly and predicted that inflation would probably fall sharply later this year. The market will now watch upcoming data including July consumer prices on Tuesday, BoE minutes on Wednesday, and July retail sales and public finances data on Thursday for fresh clues on the economic outlook.
"The BoE minutes are unlikely to produce any new information, with the Monetary Policy Committee likely to have been unanimous in the decision to increase the QE programme," Stuart Bennett, senior FX strategist at Calyon, said in a note to clients. Inflation data on Tuesday are forecast to show the headline annual CPI rate falling to 1.5 percent in July from 1.8 percent in June.