Тhe euro fell against other currencies after the German Ifo business indicator dropped by more than expected and the euro zone's PMI index showed economic activity contracted in June. The Ifo's business climate index fell to 101.3 in June from 103.5 in May, worse than analysts' expectations of a more moderate decline to 102.5. The expectations component was also weak, falling to 94.7 from 97.2, again disappointing forecasts for a 96.3 reading. The PMI indicator for the services sector dropped to 49.5 from 50.6 May, and to 49.1 from 50.6 in the manufacturing sector. Being below the 50 mark, the figures mean the sectors contracted in June. Jennifer McKeown, economist at Capital Economics, said that "inflationary pressures and a solid outlook for the German economy will keep the ECB in hawkish mode for some months yet. But continued evidence of a slowdown in euro zone activity should prompt significant rate cuts next year. In the United Kingdom, the pound was also weaker after more bad news from the property market. Housing website Rightmove said prices fell 1.2 percent in June from May, the first monthly fall in June since the survey began. "This highlights the fact that house sellers' bargaining power is currently becoming ever more limited and that buyers now very much have the upper hand," said Howard Archer at Global Insight. Archer said he expects house prices to fall 12 percent both this year and next. The pound was also hurt by comments from Bank of England rate-setter Andrew Sentance. "Businesses and consumers are feeling the squeeze from higher fuel and food prices, while the difficulties in the banking system and a weakening housing market are adding to economic uncertainties," he said/