Sterling falls to 2011 low vs currency basket

LONDON, March 28 Mon Mar 28, 2011 5:18am EDT

LONDON, March 28 (Reuters) - Sterling fell to its lowest in 2011 against a basket of currencies on Monday as the pound came under broad selling pressure, falling to a two-month low against the dollar and a five month low versus the euro.

Sterling's trade-weighted index =GBP fell as low as 79.1, its weakest since late December.

The UK currency fell as low as $1.5944 GBP=D4 against the dollar, its weakest since late January, while the euro EURGBP=D4 rose to 88.19 pence, its strongest since late October 2010.

The pound has been under pressure as concerns about a fragile UK economy have dented expectations for UK interest rate hikes. Traders said its falls on Monday were exacerbated by selling in the pound against the Australian dollar GBPAUD=R related to insurance payments for Queensland flood damage.

(Reporting by London Forex team)