Sterling fell against a broadly firmer dollar for a fifth day running on Tuesday after expectations grew of further interest rate rises in the United States and an imminent British rate cut. British housing prices fell in the three months to June although at a slower rate than in the three months to May, a survey by the Royal Institution of Chartered Surveyors showed.
"They have just reinforced the view that rates are going to fall at some point over the next months," Bank of New York currency strategist Neil Mellor said.
By 1355 GMT, sterling traded down 0.7 percent against the dollar at $1.7363.
The pound traded flat against the euro at 68.96 pence, a little above 3-1/2 month lows set yesterday.
Hovever, it fell to its lowest value against the Australian dollar since October 1997 at 43.18 pence, helped by last week's A$5 billion in debt issuance, the majority of which is due for settlement this week.
Investors bought the US dollar in anticipation of an upbeat review of the US economy from Federal Reserve chief Alan Greenspan in his testimony to Congress on Wednesday.
"The dollar bulls are totally in control. It has been a dollar-determined market today," Bank of New York's Mellor said.
Investors are awaiting Wednesday's minutes from the July Bank of England meeting, where policymakers left rates on hold at 4.75 percent.
Analysts polled by Reuters predicted three out of nine BoE policymakers wanted lower borrowing costs at the meeting.