Sterling steady vs dollar, slips vs euro after Ifo; Draghi eyed

By Jamie McGeever

LONDON, April 24 (Reuters) - Sterling held steady on Thursday against the dollar, supported by expectations Britain's strengthening economy will lead it to raise interest rates before the U.S. It slipped against the euro after another strong economic indicator from the euro zone.

The Ifo index of German business sentiment rose more than expected in March, pushing the euro up across the board .

The euro rose 0.1 percent on the day to 82.40 pence , while sterling was little changed against the dollar at just below $1.68, close to the 4 1/2-year high of $1.6842 struck a week ago.

The debate on when the Bank of England will raise rates continues to dominate sterling trading. With unemployment falling faster than the Bank had expected and the UK among the fastest growing developed economies in the world, the betting is it could be early next year.

The latest evidence of the health of the UK consumer will come at 1000 GMT on Thursday, when the Confederation of British Industry releases its monthly Distributive Trades report. The survey of the retail sector comes ahead of official retail sales figures on Friday.

Less than a year ago, sterling was trading under $1.50. Now it is close to $1.70. Some analysts say another catalyst in the form of surprisingly strong economic news might be needed to maintain its upward momentum.

"Sterling continues to look well-supported, with $1.6845 now acting as a temporary cap," said Michael Hewson, senior markets strategist at CMC Markets. "But the move higher continues to lack conviction, meaning that we continue to have some resistance here."

On euro/sterling, Hewson said the 200-day moving average around 83.90 pence will continue to provide major technical resistance to further gains for the euro.

Euro/sterling traders will also be paying close attention to a speech later on Thursday by European Central Bank President Mario Draghi, particularly what he says about expectations of a quantitative easing programme that could weaken the euro. (Editing by Larry King)