The dollar remained unable to shake off the effects of weak US third quarter GDP data released last week, but stabilised somewhat ahead of key data this week, dealers said. The Commerce Department estimated that the US economy grew at a 1.6 pct annualised rate, down on the 2.6 pct growth in the previous three months and the heady 5.6 pct recorded in the first quarter. Economists had been a more modest slowdown to 2.1 pct. The news suggested that US interest rates may have already hit peak and in turn weighed on the dollar. Today, however, the dollar's falls tapered slightly as investors started to look ahead. "This week is packed with important US data: personal income and spending as well as consumer confidence may support the view that US fourth quarter GDP may be stronger than in the third quarter on continued healthy consumption," said Gavin Friend at Commerzbank Corporates and Markets. But there is a risk that other US data this week, such as the forward looking purchasing managers indices for the services and manufacturing sectors, may come in on the soft side while home sales data could remain weak. If so, the dollar may well fall further. Steve Pearson at HBOS believes the dollar could gain some lost ground if data from outside the US shows that the economic slowdown is also spreading elsewhere. "Friday's US Employment Report is one of the last economic releases with the gravitas to materially alter market perceptions ahead of year-end. A robust report could put a Fed hike back on the agenda, tepid data will sustain the recent dollar-negative environment," said Pearson. Despite this, the dollar could also benefit from severe weakness if global -- as opposed to US only -- growth expectations take a material hit, he added. Analysts also pointed out that Friday's weak US data caught many unawares. Speculative traders were caught out with record long positions and reduced these positions sharply. Elsewhere today, the pound bounced higher after some surprisingly strong UK property market and money supply numbers. UK September mortgage approvals hit their highest in over two-and-a-half years, while mortgage lending growth stayed steady, figures from the Bank of England showed. The figures suggest that the UK housing market remains surprisingly buoyant, further suggesting that the Bank of England will raise interest rates by a further quarter point this month. The number of approvals for house purchases -- often seen as a good indicator of future demand in the property sector -- jumped to 126,000 from 120,000 in August, the highest figures since since February 2004. The figure is well above market expectations for a slight dip to 117,000. The value of approvals for house purchases rose to 16.9 bln stg from 16.3 bln in August. Investec economist David Page described the jump in mortgage approvals as a "big surprise", which points to a "very firm close to 2006 in terms of housing market activity". A Bank of England interest rate rise this month to 5.0 pct is already fully expected, but today's evidence of continued strength in the housing market increases the argument for rates rising above and beyond that, he said. Additionally, the central bank said M4 money, a broad measure of money supply, posted its biggest rise in 16 years on an annual basis in September, raising concerns about medium-term demand and inflation pressures. M4 rose by 1.7 pct in September from August on a seasonally adjusted basis, for a 14.5 pct year-on-year gain, the biggest rise since September 1990. The odds continue to shorten for a November rate hike while chances of another hike in 2007 remains open.