The sterling fared no better than the dollar on Tuesday. It touched an eight-month low against the euro on the same kind of diversification talk which handed a blow to the dollar. But the damage to the pound was not as severe as that suffered by the dollar and the yen. The currency was up 0.9 percent against the greenback.

The sterling also got some back-up from steady economic data. Signs of a recovering housing market seemed to be the reason many made mortgage equity withdrawals. The Bank of England, meanwhile, is expected to keep rates at 4.5 percent when it meets this week. This might be to its disadvantage since the euro zone is likely to see some interest rate hikes this year.