Sterling jumps vs weakened euro, capped by poor UK data

* Stg broadens gains vs euro, hits 3-wk high

* Single currency sapped on ECB rate cut expectations

* UK housing, consumer confidence data weaker than expected

* Services PMI seen remaining deep in contraction territory

LONDON, Jan 6 (Reuters) - Sterling extended gains versus a broadly weak euro on Tuesday, moving further away from parity with the single currency, but was pinned down against the dollar as dismal data underlined the UK's economic vulnerability. The euro's losses mounted, after it suffered a record one-day loss against the pound on Monday, on speculation the European Central Bank would be forced to cut rates deeper and perhaps sooner than expected as regional price pressures ease.

The single currency's losses also took the euro to three-week lows against the dollar, while it sank sharply versus the yen.

"With the situation in Europe deteriorating quite rapidly it leaves the euro quite vulnerable," said Ian Stannard, senior currency strategist at BNP Paribas in London.

The European Central Bank meets next week to decide on interest rates, with markets largely pricing in a chance of rates being cut 50 basis points to 2 percent.