Sterling falls broadly due to economy jitters

* Sterling falls broadly, hits lowest vs CHF since Jan 2009

* Global worries hit higher-risk FX, Cable hits 5-wk low

* Sterling fails to benefit as UK mortgage approvals improve

By Naomi Tajitsu

LONDON, Aug 31 (Reuters) - Sterling fell broadly on Tuesday, hitting a five-week low against the dollar and its weakest versus the Swiss franc since early 2009 as concerns about the global economic outlook prompted investors to dump higher-risk currencies.

The pound fell despite data showing a gain in UK mortgage approvals and consumer credit, breaking below its 200-day moving average and other support levels, which market participants said would put more selling pressure on the UK currency. Analysts said overall moves in sterling were driven by rallies in the Swiss franc and the yen, both of which tend to appreciate during times of uncertainty due to their "safe-haven" status because of traditionally low yields.

"There's a perception that the UK economic data is as good as it's going to get," said Michael Hewson, strategist at CMC Markets.

"Investors feel there are a lot of safer currencies to be in at the moment, including the yen and the Swiss franc, and this is having a broad, downward effect on sterling."

By 1620 GMT, sterling GBPCHF=R had fallen 1.9 percent on the day to 1.5554 francs, its weakest since early January 2009. It fell 1.4 percent versus the yen to 128.85 yen. A fall under 128.71 yen would be its lowest since May.

It fell nearly 1 percent against the dollar to $1.5327, its lowest in five weeks. A break under its 200-day moving average at $1.5440 accelerated sterling's losses and pushed it through key support at $1.5373, a low hit earlier this month.

Some traders said a further fall was limited by support at $1.5322, the 38.2 percent Fibonacci retracement of the pound's May-August rally.

Sterling also fell against the euro EURGBP=D4, which rose 1.1 percent to 82.89 pence, its highest in roughly three weeks. Some traders cited speculation of month-end euro/sterling demand from European central banks as pushing the single currency higher.

Market participants also said a UK bank was seen picking up the euro versus the pound.

Analysts said sterling was being driven by wider developments on financial markets, with concern that a flagging U.S. economy will hamper the global recovery.

BETTER DATA

An upward revision late last week to already solid second-quarter gross domestic product growth bolstered the view that the UK economy performed well in the first half of 2010, but many analysts think such a performance is unsustainable.

GfK/NOP's consumer confidence measure, released early on Tuesday, unexpectedly improved [ID:nLDE67Q11Q]. Another survey showed inflation expectations rose, keeping alive concerns among some Bank of England policymakers about rising price pressures. [ID:nNLAH00678]

Market participants were wary, however, with the economy vulnerable as public spending is slashed and if the U.S. slowdown gathers pace, while the signals on some areas of the UK economy, especially the housing market, have been patchy.

Bank of England data showed mortgage approvals numbered 48,722 in July, just above an upwardly revised 48,562 in June. [ID:nBELVJE610]

Sterling edged up ahead of the data, but was unable to hold those gains.

"There is not much conviction in any sterling rallies at the moment," said Adam Cole, global head of currency strategy at RBC Capital Markets. (Additional reporting by Jessica Mortimer; editing by Stephen Nisbet)