Sterling rises above $1.50 for first time in a month

LONDON, April 17 (Reuters) - Sterling hit a four-week high against a weaker dollar on Friday, helped by a strong British jobs report with many investors also cutting favourable long dollar bets as expectations of a U.S. rate hike get pushed back.

Data released on Friday showed the number of people in employment rose by 248,000 to a record 31.049 million. The unemployment rate also fell to 5.6 percent, its lowest level since July 2008 and down from 7.9 percent at the time of the last election.

Sterling rose 0.6 percent to $1.5036, its highest since March 18, and up 2.65 percent so far in the week -- on track for its best weekly performance since October 2009. It has suffered in the past few weeks mainly due to uncertainty before a May 7 national election.

Most polls show the Conservatives and the Labour Party neck and neck, meaning a hung parliament is likely. A strong showing by smaller parties like the Scottish Nationalists also makes it hard to predict who will win and whether a stable government can be formed.

"The employment report just proves again how consistently strong the UK fundamentals are," said Jameel Ahmad, chief market analyst at FXTM.

"We really need further and substantial dollar softness for the pair to stay above $1.50. Otherwise, the downside risks are strong and investors are just looking at another opportunity to sell on rallies."

The dollar index fell for a fourth straight day on Friday, after a run of weak U.S. economic data cast doubt on prospects for a Federal Reserve rate rise in coming months.

And while UK data has been relatively better, inflation is still subdued near zero, allowing the Bank of England to keep interest rates lower for longer.

On Friday, data showed wage growth in the UK was still subdued. Total (Swiss: FP.SW - news) average weekly earnings in the three months to February, including bonuses, rose 1.7 percent compared with the same period a year earlier, slowing from 1.9 percent in January. Excluding bonuses, pay rose by 1.8 percent.

Economists taking part in a Reuters poll had forecast total earnings would rise by 1.8 percent and that earnings excluding bonuses would increase by 1.7 percent.

"The combination of election uncertainty, subdued inflation, and expectations that a UK rate hike is not factored in until well into 2016, means sterling will run into selling at higher levels," said a London based spot trader.

The euro was down 0.1 percent against sterling at 72 pence. (Reporting by Anirban Nag; Editing by Andrew Heavens)