Sterling falls vs euro on weak UK data; gains vs dlr

* Weak UK manufacturing PMI pushes pound lower vs euro

* Euro hits 3-week high of 83.28 pence EURGBP=D4

* But sterling gains 0.6 pct vs broadly weaker dollar

LONDON, Sept 1 (Reuters) - Sterling hit a three-week low against the euro on Wednesday after a UK purchasing managers' survey came in sharply lower than expectations, raising concerns the UK economy could struggle in the coming months.

Against the dollar, the pound rose strongly, however, as the U.S. currency came under pressure against a range of currencies after upbeat data from China and Australia soothed worries about the health of the global economy and boosted risk appetite.

The UK purchasing managers' index on manufacturing activity fell to 54.3 in August -- below all forecasts in a Reuters poll and the lowest level since November last year. [ID:nSLAVJE6BA]

The weak data meant the pound underperformed currencies such as the euro and the Australian dollar, and the single currency rose as high as 83.28 pence EURGBP=D4, its strongest since Aug. 10. By 1518 GMT, it was up 0.4 percent at 82.90 pence.

Trade-weighted sterling earlier fell as low as 81.6 =GBP, not far from a one-month low, but gains in sterling against the dollar helped it recover to 81.9 later in the session.

"The market was minded to take euro/sterling higher after it broke above some important technical levels yesterday," said Chris Turner, currency strategist at ING.

He said the euro had risen above a trendline at around 82.30/40 pence, which marked an 8-week bear trend.

Against the dollar, however, sterling GBP=D4 gained 0.6 percent to $1.5444, above its 200-day moving average currently at $1.5434.

Support was seen near $1.5322, the 38.2 percent Fibonacci retracement of the pair's May-August rally. Sterling had hit a five-week low of $1.5327 on Tuesday.

Sterling dipped into negative territory versus the dollar after the UK data but the falls were short-lived, with the pound tracking gains in riskier currencies after strong Chinese and Australian data dampened safe-haven demand for the U.S. unit. [ID:nSGE67U0L3] [ID:nTOE68001O]

Weak U.S. private payrolls data further dented the dollar later in the session.

"It's a risk favourable environment, and a bit of a surprise that the Asia-Pacific sector is doing well," said Geoffrey Yu, currency strategist at UBS.

However, analysts said market participants were wary that the weak UK manufacturing PMI survey served as a reminder that the UK economy is likely to struggle in the coming months as the government presses ahead with planned public spending cuts.

"There is further support here for the view that the rapid growth in the economy seen in Q2 - to which industry made a strong contribution - will not be sustained in the coming quarters," said Jonathan Loynes, chief european economist at Capital Economics. (Reporting by Jessica Mortimer; additional reporting by Tamawa Desai; editing by Stephen Nisbet)