Sterling weaker after UK construction survey disappoints

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LONDON, Feb 2 (Reuters) - Sterling hit a session low against the dollar and the euro on Tuesday after a survey on Britain's construction sector showed growth slipping to a 9-month low in January and denting expectations of a pick-up in gross domestic output.

The pound was 0.7 percent down at $1.4329, having traded at $1.4365 immediately before the data.

The euro was down 0.9 percent at 76.14 pence, having traded at 76.0 pence before the data. The low-yielding euro was also being helped by weak risk sentiment worldwide.

"The PMI (Other OTC: PMIR - news) survey was weaker and in a risk-off environment sterling doesn't tend to do well given all the uncertainty about UK growth and the BoE pushing back rate hike expectations," TD Securities European head of FX strategy, Ned Rumpeltin, said.

Sterling had started the week on a brighter note after a robust reading of manufacturing sentiment on Monday, although concerns over increased public support for Britain's exit from the European Union checked gains.

The pound has suffered since December on a mix of collapsing expectations for rises in Bank of England interest rates and worries that the "Brexit" debate this year will lead to a withdrawal - or at least halt inflows - of foreign capital.

Brexit would also be likely to hit exports, potentially hurting growth.

A report by HiFX, an international money transfer specialist, showed almost a fifth of their corporate customers would see their exports to the euro zone drop if Britain decides to leave the European Union.

Traders are now waiting for the proposals European Council President Donald Tusk is due to present on Tuesday for keeping Britain in the EU.

Britain hailed a deal reached with the EU on Monday allowing nation states to block some legislation, a step Prime Minister David Cameron says he needs to persuade Britons to vote to stay in the bloc in a referendum that could be held in June. (Reporting by Anirban Nag; Editing by Louise Ireland)