 Pound Weakens Against Dollar as Property Prices in U.K. Decline
The pound weakened against the dollar after an industry survey showed house prices fell for an eighth month in May and will probably drop further.
The U.K. currency slipped for a second day versus its U.S. counterpart after London-based Hometrack Ltd. said the average cost of a residential property in England and Wales declined by the most in the year since November 2005. Markets in London and New York were closed today for public holidays.
``Clearly the U.K. has problems in the housing market, and that won't help the pound,'' said Martin McMahon, a currency strategist in Zurich at Credit Suisse Group, Switzerland's second-largest bank. ``Trading volumes will be thin though with the holiday today.''
The pound dropped to $1.9772 by 10 a.m. in London, from $1.9798 late on May 23. It was also at 79.62 pence per euro, from 79.63 pence at the end of last week.
Bank of England Governor Mervyn King this month predicted house prices are ``likely to fall further.'' The U.K. economy grew at its slowest pace since 2005 in the first quarter and homebuilders are cutting tens of thousands of jobs.
The percentage of property sellers who achieved their asking prices slipped to 92.3 percent this month, Hometrack said, the lowest since the survey began in 2001. The average time properties remained unsold increased to 9.8 weeks from 5.8 weeks a year ago. | 
