* Sterling close to highest level since Nov 2008 vs euro
* Pound steady despite weak retail sales, house price data
* UK industrial output data due 0830 GMT
By Michael Szabo
LONDON, July 10 (Reuters) - Sterling hovered near a 3-1/2
year high against a softer euro on Tuesday, shrugging off
expectations of more weak UK data after a meeting of euro zone
finance ministers failed to inject confidence into the market.
Sentiment towards perceived riskier currencies was muted
after European ministers made little progress overnight towards
using the bloc's rescue funds to combat soaring Spanish and
Italian borrowing costs.
The euro fell 0.1 percent against the pound to
79.22 pence, near a low of 79.06 hit on Monday, its weakest
level since November 2008.
Against the safe-haven dollar, sterling dipped 0.1 percent
to $1.5505, holding steady despite retail sales and house price
data released earlier on Tuesday that reflected a weakening
British economy.
"The numbers were pretty poor, spelling the story of a
slowing economy, but they've not had a massive impact on
sterling," said Simon Derrick, head of currency research at Bank
of New York Mellon.
British retail sales rose 1.4 percent in June, the British
Retail Consortium said, far below the 2 percent estimated by
analysts, while UK house prices fell more than expected.
The UK economy was poised for more bad news with British
industrial output data for May, to be released at 0830 GMT,
expected to show a 0.2 percent month-on-month decline, according
to a Reuters poll.
But Derrick said more bearish data had largely been priced
into the market, and an output fall closer to 1 percent would be
required to prompt a significant move in sterling.
The market will also scrutinise minutes from last month's
meeting of the U.S. Federal Reserve, to be published on
Wednesday. Any indication the Fed may opt for another round of
asset buying before the end of the year is likely to weigh on
the dollar versus sterling.
