The euro reached another record high against sterling this afternoon after it hit £0.7990 pence, beating the 79.64 pence mark set on March 31st.
Sterling came under pressure today as data from Halifax showed that UK house prices fell in March at their sharpest monthly pace since September 1992.
At 3.05pm the euro was trading at hit £0.7989 and $1.5715, having given up earlier gains.
The dollar rose against a basket of currencies today amid growing views that a sharp economic downturn in the United States could spread to other countries and prompt their central banks to cut interest rates.
These concerns appeared to be supported by data showing a sharp drop in UK home prices which pushed sterling to a record low against the euro and made it the biggest loser among major currencies.
Analysts said the dollar, which had seen some selling pressure overnight, was being supported investors' reluctance to aggressively buy the euro ahead of Thursday's European Central Bank meeting and a G7 gathering later in the week.