Sterling profits from broad dollar weakness

LONDON, March 25 (Reuters) - Sterling bounced up against the dollar on Tuesday, profiting from a broad-sell off in the U.S. currency fuelled by data showing an unexpectedly large fall in February U.S. consumer confidence.

The pound also benefited from a pick-up in risk appetite after equity markets and especially banking stocks were cheered by news that JP Morgan had raised its offer for stricken rival Bear Stearns five fold, to $10 a share.

"It's a dollar story primarily, although sterling is also making a bit of progress against some of the crosses," said Adam Cole, global head of FX currency strategy at RBC Capital Markets.

By 1444 GMT, sterling was up half a percent at $1.9962 GBP=. On a trade-weighted basis it fixed at 93.90 -- above 11-year troughs of 93.10 hit last week =GBP.

However the euro rose half a percent to 78.05 pence -- edging back towards a record peak of 79.12 EURGBP=.

"Sterling might make a bit of headway against the dollar this week, moving back above $2, but I think there is still the concerns about the UK financial sector, the economy and the housing market so it's difficult for it to make much progress against the euro," said Mitul Kotecha, head of global foreign exchange research at Calyon.

The Confederation of British Industry on Tuesday cut its 2008 UK growth view to 1.8 percent from 2.0 percent, and forecast a further slowdown to 1.7 percent in 2009, saying global credit turmoil will hurt economic growth well into next year [ID:nL24302291].

No first tier UK data is due on Wednesday, but several Bank of England policymakers, including Governor Mervyn King, are due to appear before the Treasury Committee to discuss the Bank's February inflation report. (Reporting by Toni Vorobyova; Editing by David Christian-Edwards)