Sterling fell broadly on Thursday, hitting a one-week low against the dollar on concerns about UK fiscal health and very weak UK money supply data. Although British public sector borrowing was slightly less than expected in December, it still hit record highs for the month and the financial year to date, highlighting the UK's poor fiscal health.

This, along with news of a record 1.1 percent monthly fall in M4 money supply in December, added to the pound's earlier losses, when jittery investors sold the currency before the data was released. In a speech this week, BoE governor Mervyn King described monetary growth in the UK as "undesirably low".

At 1604 GMT, sterling was down 0.7 percent against a broadly firmer dollar at $1.6172, having earlier hit a one-week low of $1.6123 to take it below its 200-day moving average around $1.6176.

The pound also fell against the euro, although it stayed close to the previous day's five-month highs as the single currency remained under pressure on concerns about the fiscal health of Greece and some other eurozone countries. The euro rose 0.3 percent to 86.85 pence, having earlier risen as high as 87.11 pence.

It remained close to a five-month low of 86.50 pence hit on Wednesday, however, and was well below its 200-day moving average at around 88.42 pence. Sterling's broad losses pushed its trade-weighted index down as much as 0.4 points to 81.3.

Copyright Reuters, 2010