( AFP ) - Geopolitical fears following news of the killing of Pakistani opposition leader Benazir Bhutto hit the pound as well as the dollar, with the euro hitting a new record high of 0.7338 against the UK currency.
The pound has come under broad pressure recently following a string of weak UK data and expectations that the Bank of England will cut interest rates further early in the New Year.
Elsewhere, the dollar extended losses on further weak data out of the US, while geopolitical fears following news of Bhutto's death sparked buying of safe haven assets, boosting the Swiss Franc and the euro.
Data show new orders for US durable goods rose just 0.1 percent, barely reversing three months of consecutive declines and confounding forecasts for a 3.0 percent rise. Taking out a boost from strong Boeing orders, however, orders ex-transportation fell by 0.7 percent, against forecasts for a 0.5 percent rise.
The news came alongside weak US jobless claims numbers and followed a dismal S& P/Case-Shiller housing market report yesterday.
Meanwhile, news of the assassination of Benazir Bhutto sparked fears of instability in the region, boosting safe haven assets such as gold prices and the Swiss franc, while the euro also benefited.
"The news may be tragic, but it quite likely will also have critical political implications in a critical part of the world, not to mention a critical ally of the US's war on terror," said Michael Cartine at Thomson IFR Markets.
The combination of this and the weak US data took the euro above the 1.46 US dollar mark for the first time since mid-December, hitting a high of 1.4609 US dollars.
Sterling 1640 GMT 1250 GMT
US dollar 1.9894 down from 1.9904
Euro 1.3631 down from 1.3721
Yen 226.78 down from 227.96
Swiss franc 2.2695 down from 2.2886