* Sterling rises vs euro, near 1-mth high; dips vs dollar * Investors disappointed at lack of progress at EU summit * Euro may target a nine-month low of 84.86 penc * UK producer prices, trade data due at 0930 By Jessica Mortimer LONDON, Dec 9 (Reuters) - Sterling stayed close to a one-month high versus the euro on Friday, with a choppy morning session reflecting uncertainty over the outcome of a European summit that did little to impress markets overnight. The pound looked on track to test its strongest level against the euro since March as it benefitted from investors seeking alternatives to the euro. However, it remained weak versus the dollar as concerns about the lack of a euro crisis solution weighed broadly on riskier currencies and supported safe haven flows into the U.S. dollar. EU leaders agreed stricter budget rules for the euro zone but failed to secure changes to the EU treaty among all 27 member states. Countries also failed to reach an agreement on giving a banking license to the euro zone's permanent bailout fund, limiting its firepower. The euro was steady at 85.34 pence, near a one-month low of 84.96 pence hit on Thursday. This left it in sight of the Nov. 10 low of 84.86 pence, below which would be the euro's weakest since March. Sterling was steady against the dollar at $1.5634, well below a high of $1.5770 hit on Thursday, its strongest in more than a week, and holding below its 21-day moving average at $1.5672. "The talks last night did not go as far as markets were hoping. They agreed some elements of fiscal union but were short on treaty change," said Geraldine Concagh, economist at AIB Group Treasury in Dublin. "Versus the dollar, sterling's moves will be driven by market sentiment, but there may have been a shift in sterling against the euro and the break below 85.00 (in euro/sterling) could be significant," she said. She added sterling may be gaining momentum as a safer alternative to the euro, although it could also be driven by year-end flows. Britain said it could not accept proposed amendments to the EU treaty after failing to secure concessions for itself. Analysts said while it may be positive for sterling if a proposal from the EU for a tax on financial transactions did not impact the UK, there were also concerns the UK would be left isolated, with much less influence in Europe. Renewed falls versus the dollar would see the pound target the Dec. 6 low of $1.5562 and the late November low of $1.5423. UK producer prices and trade data at 0930 GMT were not expected to have any impact on sterling, although analysts said the trade figures may give an indication of the extent to which the euro zone crisis was harming UK exports. Investors remained concerned about the risks facing the UK economy and its vulnerability in the event of a severe downturn in the euro zone. On Thursday, the Bank of England kept interest rates at a record low 0.5 percent and announced no change to its 275 billion pound asset purchase programme. However, many in the market expect the central bank to announce additional quantitative easing next year to prop up a flailing economy.

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