LONDON, Sept 10 - Sterling rose to a three-week high against the dollar on Wednesday but held near one-month lows versus the euro, struggling to find its own momentum in a market dominated by a bout of doubts about the U.S. economy. The pound's slight rise versus the dollar was mainly a follow through from Tuesday's gains of almost 1-1/2 cents, as the dollar fell across the board. Markets have been focused this week on the dollar's slide against the euro since a worse than expected U.S. jobs report last Friday rekindled fears the world's largest economy may not be recovering as well as hoped.
"Sterling is not really moving of its own accord. We've had some numbers out this week -- strong industrial production -- but people feel that if the U.S. recovery is curtailed, the UK's will be too," said Lee Ferridge, head of global currency strategy at Rabobank. "The market is still reacting to that U.S. payrolls number -- even after all this time. People now are questioning whether the whole recovery has just been a small bounce and is not going to turn into a full-blown recovery with job growth." By 0730 GMT, the pound had edged up to a high of $1.5944 , its highest since August 20, though the pound was little changed from its previous close. Against the euro, sterling was trading at 70.39 pence , up a touch from late New York levels but near Tuesday's trough of 70.68 pence, the pound's worst level since August 12. The pound has largely shrugged off the week's main UK data, showing strong industrial production in July and a lower than expected trade deficit that month as well.
There is no major data on the calendar for sterling for the remainder of the week.//