FOREX-Sterling's Scotland-inspired gains show signs of waning

(Recasts, adds details)

* Sterling pares gains to trade weaker against the USD

* Strong U.S. jobless claims boosts U.S. yields and dollar

* Yen hits six-year low vs dollar, sterling

By Anirban Nag

LONDON, Sept 19 (Reuters) - Sterling's gains to a two-year peak against the euro and a two-week high versus the dollar on Friday after Scottish voters rejected independence ran out of steam as investors focused on the UK economy and new constitutional problems for Britain.

Analysts pointed to risk factors like promises for more powers to Scotland that could open up the prospects for some constitutional changes to next May's general election as risk factors for the pound. These could add some uncertainty to UK growth prospects and tie sterling down in the near term.

Earlier, sterling jumped to $1.6525 in Asian trade, its highest since Sept. 2, as early results pointed to a victory for the Unionists. It turned lower in European trade to drop to $1.6385, down 0.1 percent on the day amid solid volumes.

Sterling eased from a two-year high of 78.10 pence per euro to trade at 78.52 pence per euro. It had also hit a six-year high against the yen, before slipping back.

"We still have to worry about the prospect of major constitutional upheaval," said Gregor Macintosh, head of sovereign and emerging debt, at Lombard Odier, one of the largest Swiss private banks.

"Now (NYSE: DNOW - news) that the referendum hurdle has passed, the glare of next year's general election is intensifying. This means that investors are still likely to demand a higher political risk premium in their valuation of UK assets. From the perspective of our portfolio positioning, we have begun to re-build short positions in sterling versus the dollar."

Nevertheless, Scotland's rejection of independence ended a volatile few weeks for markets that saw sterling fall sharply to 10-month lows against the dollar after some polls suggested the 307-year old union was on the brink of collapse.

Investors heaved a sigh of relief after the results and the cost of hedging against sharp fluctuations in the pound fell sharply. These costs had risen to four-year highs in the past two weeks after polls showed the vote was too close.

Analysts said while sterling could struggle to gain much against the dollar, it stood to gain against the euro and yen, since both the European Central Bank and the Bank of Japan are likely to pursue ultra-loose monetary policy.

Investors are still pricing in the chance of a first rate increase by the Bank of England in the spring of 2015.

The Federal Reserve reiterated this week that near zero rates will be maintained for a considerable time, but policymakers also indicated they expect faster rate hikes next year and the year after. The Fed nudged up its expected path of interest rate increases - or Fed dots - boosting yields on U.S. notes, and hence the appeal of the dollar.

DOLLAR HIGHER, EURO WEAKER

The dollar rose against the yen, scaling a six-year high as a drop in U.S. jobless claims reinforced the market's view of the diverging trajectory of U.S. and Japanese interest rates.

The dollar jumped to as high as 109.46 yen before stepping back to 108.85 yen, still up 0.2 percent on the day.

"After the dot-related strength of the dollar and the increased market focus on further easing in Japan, dollar/yen has accelerated higher and now has the potential to get to the 110 level and even beyond to the 110.67 area, the high from 2008, in our view," Morgan Stanley (Xetra: 885836 - news) said in a note.

The dollar index, a measure of the greenback's value against six currencies, was up 0.25 percent at 84.533, not far from a four-year high of 84.782.

The euro was trading softer, at $1.2865, having hit a 14-month low of $1.2834 on Thursday.

It has been under some pressure after the ECB handed out a below-forecast 82.6 billion euros in its first offering of four-year loans on Thursday. Traders said the lower take-up would keep pressure on the ECB to opt for quantitative easing. (Editing by Tom Heneghan)