Sterling hits three-week low

LONDON (Reuters) - Sterling hit a three-week low against the dollar on Wednesday as the greenback rose broadly on stronger-than-expected U.S. jobs data, while the pound remained pressured by persistent fears about the UK economy.

The dollar rose to its strongest level in roughly a month versus the euro and other currencies after an independent report showed the U.S. private sector unexpectedly added jobs in July.

U.S. private employers added 9,000 jobs, according to ADP Employer Services. Economists surveyed by Reuters had forecast a drop of 60,000.

Some in the market said the dollar was also supported by announcements by the Federal Reserve, the European Central bank and the Swiss National Bank that they would extend existing credit facilities to financial institutions aimed to boost liquidity in stressed markets.

Due to a lack of major economic data over the rest of the week, investors will closely watch an advance estimate of second-quarter U.S. gross domestic product and U.S. non-farm payrolls.

"Tomorrow's GDP figures out of the States and the non-farm payrolls on Friday are going to be the main focus so sterling is playing a bit part to the U.S. story," said Henry Wilkes, head of forex trading at Brown Brothers Harriman.

By 2:38 p.m., the pound was down nearly 0.2 percent on the day at $1.9760, its lowest since July 10. But it rose against the euro, which was down by the same amount at 78.61 pence.

A slew of negative economic data this week, including soft retail figures and mortgage data, has hurt sterling.

"Everyone's expecting the UK economy to slow even more. The retail figures were dire, and the mortgage figures were dire, so it's not looking very good," said Wilkes at BBH, adding that this would likely keep sterling under selling pressure.