Sterling falls vs euro as house prices slip again

LONDON (Reuters) - Sterling fell against the euro on Monday after figures from property consultant Hometrack showed UK house prices fell in July for the 10th month running.

Losses were curtailed however against a broadly weaker dollar, which fell against a basket of six major currencies and the euro as worries over the U.S. financial sector nagged.

Although initial estimates on Friday of growth in the second quarter were in line with forecasts and helped lift sterling from two-week lows set the previous day, Monday's poor housing figures rekindled general growth fears.

"Sterling generally remains on the back foot given the deteriorating economic output for the UK. (The housing data) would have impacted negatively, it is just adding to the general gloom which is surrounding the housing market at the moment," AIB Group Treasury economist Geraldine Concagh said.

House prices in England and Wales fell 1.2 percent in July, Hometrack said, giving an annual fall of 4.4 percent, the biggest annual fall since the survey began in 2001.

The euro was up 0.2 percent on the day at 79.09 pence and the pound slipped 0.1 percent against the dollar to $1.9885.

The euro was trading right up at technical resistance at the 100-day moving average of 79.09 pence, according to Reuters charts, suggesting it may struggle to appreciate further in the near term.

Support from the 100-day moving average "cable" comes in at $1.9800, Reuters charts show.

Sterling's downside is being capped by the view that the Bank of England's next move in interest rates could still be an increase, as policymakers fight to bring inflation back down to target.