Sterling on Tuesday fell to its lowest level against the euro since May after a survey suggested higher interest rates were cooling Britain's red-hot housing market.
The Royal Institute of Chartered Surveyors said house prices in Britain rose at their slowest pace in a year in the three months to July as higher borrowing costs led to a drop in new buyer enquiries.
The Bank of England has raised rates five times since November, partly to cool house price inflation and consumer borrowing.
"The RICS survey does seem to be weighing on sterling and people are reassessing how much higher UK interest rates need to go," said Ian Gunner, head of foreign exchange research at Mellon Financial Corporation.
Sterling stood at session lows of 67.41 pence per euro at 1412 GMT, having triggered automatic sell orders on the break of key support around 67.30/32 pence.
The pound was also half a percent lower against the dollar, at $1.8320, moving further away from three-week highs scaled on Monday.
Minutes of this month's Bank of England's policy meeting will be released on Wednesday and markets expect an unanimous vote to raise rates to 4.75 percent.