The euro extended gains against the pound, hitting new record highs as the UK currency continued to suffer from a string of recent poor data, while edging up against the dollar in very thin holiday trade. The pound has come under heavy pressure recently as a run of weak data and last week's dovish Monetary Policy Committee minutes increase fears over the outlook for the UK economy as well as the chances that UK interest rates will fall further and faster than previously thought. A survey by Hometrack overnight showed the sharpest monthly house price decline in the UK in three years and is only the latest in a series of housing surveys and data which have painted a bleak picture on the property market. "With a rapidly slowing housing sector, an ominously large trade deficit, tight credit conditions for consumers and heavy pre-Christmas discounts emerging in the key retail sector, the UK unit is rapidly losing its shine," said Simon Derrick at the Bank of New York Mellon. The euro has hit a fresh record high against the pound of 0.7276 stg, while the pound hit a new four-month low against the dollar of just below 1.98 usd. Elsewhere, the yen was weaker as stronger equity markets caused a pick-up in risk appetite and demand for the carry trade -- where investors borrow in low-yielding currencies such as the yen to invest in higher-yielding assets elsewhere. Among high-yielding currencies, the Australian dollar was a particular beneficiary, hitting a 12-day high against the yen as well as a 10-day high against the US dollar. The Canadian dollar was also firmer, continuing its move below parity against its US counterpart as the US dollar hit a 25-day low of 0.9868 against the Canadian currency.