Sterling hits 1-month low vs euro

LONDON (Reuters) - Sterling hit a one-month low against the euro on Monday after an unexpected fall in British consumer confidence underlined weakness in the domestic economy.

The pound also slipped against the dollar after earlier gaining on the view that Dubai may have avoided the worst of its debt-related problems, prompting some demand for currencies considered to be higher risk.

Analysts said overall demand for sterling may remain sluggish amid evidence that the UK economy is struggling.

"There are still question marks about the UK economy and the consumer confidence figures are helping to keep sterling weak," said Neil Rumpeltin, currency strategist at Nomura in London.

"The UK economy remains the laggard of the G7 nations, and the data is just another reminder of this."

A monthly GfK NOP survey showed its UK consumer confidence index fell to -17 in November from -13 in October, below a Reuters forecast for -11 and marking the first fall since January.

By 2:43 p.m. British time, the euro had risen half a percent on the day to 91.38 pence, its highest since late October.

Sterling traded unchanged on the day at $1.6477, retreating from a climb as high as $1.6593 earlier in the day. The UK currency had fallen as low as $1.6252 on Friday, hitting its weakest in more than three weeks after Dubai's debt shock.

The pound pulled back on Monday after it was unable to climb into the $1.66 region due to technical resistance, with the 21-day moving average hovering around $1.6610 and the 14-day moving average around $1.6625.