Sterling slipped against a broadly firmer dollar on Thursday after a record fall in UK house prices added to the view that the economy may continue to weaken.
Despite losses versus the dollar, the pound hit a three-week high against the euro, which struggled after a soft reading of regional consumer confidence and a surprising rise in the German jobless rate added to concerns that the region's economy may also be slowing down.
British house prices fell 2.5 percent in May, the biggest drop ever, Nationwide Building Society data showed on Thursday. This heightened concerns that a property market downturn might transform into a crash and further weaken the economy.
Other data showed UK retail sales data registered a smaller-than-expected fall on the month in May as retailers ramped up prices at their sharpest rate since 1992. Sterling traded 0.2 percent lower at $1.9760, after falling more than half a percent to $1.9674, its lowest level in a week. But the euro fell nearly half a percent to 78.60 pence, pulled down by a 0.6 percent tumble against the US currency.