Sterling slips versus dollar as CBI, jobs data weighs

* Pound falls 0.2 pct vs dollar

* Rises against weak euro

* Unemployment, inflation data weigh on pound

By Laurence Fletcher

LONDON, Feb 20 (Reuters) - Sterling drifted lower against the dollar on Thursday as a weak factory order survey and data this week showing an unexpected rise in unemployment and below-target inflation eroded recent gains.

Sterling was down 0.2 percent at $1.6640 on low volume, after hitting a four-year high against the dollar on Monday.

The euro, hindered by weaker-than-forecast flash PMIs from France and the euro zone overall, was marginally down against the pound at 82.31 pence, having hit a one-year low on Monday .

Sterling has been buoyant since the BoE (Shenzhen: 000725.SZ - news) raised its forecast last week for economic growth this year to 3.4 percent from 2.8 percent. The bank also said in its inflation report that market pricing that assumed a rate hike in the second quarter of next year was consistent with keeping inflation on target.

But after Monday's highs, the pound has been weighed down by a surprise fall in inflation on Tuesday and unexpected rise in jobless on Wednesday.

A below-forecast CBI factory order book survey on Thursday also weighed on sterling.

Hans Redeker, head of global currency strategy at Morgan Stanley (Shenzhen: 002588.SZ - news) , said investor sentiment was changing.

"Sterling is a very popular long across the board," he said.

"You have to consider what happens now as risk appetite is obviously changing direction. If that puts dollars and yen into demand, then cable (the sterling-dollar exchange rate) will come under some downside pressure."

Redeker said cable could be trading close to its peak, although against currencies such as the Australian and Canadian dollars it would remain strong.

Sterling overnight interbank rates were pricing in the chance of a rate hike in 15 months' time, although this was a lower probability than was priced in two days ago.

Last week, the BoE said it would look at a range of measures of the state of the labour market before considering tightening policy. It had been using only the jobless rate since its initial forward guidance in August.