Sterling hit 3-1/2 month lows versus the euro on Monday after weak British housing data supported forecasts of interest rate cuts and oil major Shell's move to list all its shares in London this week boosted euro buying. British house prices rose at their weakest annual rate in 10 years in July as owners desperate to move dropped their asking prices, a survey from property Web site Rightmove showed.
"Data from the UK is coming in on the negative side," BNP Paribas senior foreign exchange strategist Ian Stannard said.
By 1415 GMT, sterling traded down more than a third of a percent against the euro at 68.92 pence. Earlier, sterling fell to 3-1/2 months lows of 69.14 pence.
The pound was down 0.13 percent against the dollar at $1.7490.
Sterling had traded as low as $1.7456 versus the US currency until US capital inflow figures showed the world's biggest economy received $60 billion in May, at the lower end of expectations, against a revised $47.8 billion in April.