Euro steady vs sterling, market awaiting Greek deal

* Euro firm vs sterling, all eyes on Greek talks

* Sterling holds in sight of 2-1/2 mth high vs dollar

* Forecasts for another 50 bln pounds of QE this week

By Nia Williams

LONDON, Feb 7 (Reuters) - Sterling dipped against the euro on Tuesday, with the single currency holding firm even as Greek talks on the terms of a new bailout deal dragged on.

With no UK data scheduled for Tuesday, the focus was firmly on developments in the euro zone and market players are still cautiously hopeful politicians in Athens will come to an agreement and stave off a messy default.

Greece's coalition members must agree to the painful terms of a new bailout worth 130 billion euros before euro zone finance ministers next meet. Continued failure to reach a deal would raise the prospect of an unmanaged Greek debt default when bond repayments fall due in March.

The single currency was supported by comments from Eurogroup President Jean-Claude Juncker who said he had no doubt about Greece's future in the euro zone provided the country fulfilled its duties towards other euro members.

The euro was last up 0.1 percent against the pound at 83.08 pence, holding above a near three-week low of 82.64 pence hit on Monday. It earlier climbed to a session high of 83.19 pence on the Juncker comments, triggering reported stops above 83.10 pence.

Global financial markets have started the year brightly, helping stock markets and perceived higher-risk currencies ride out wrangling over the Greece deal and worries the euro zone's crisis will drag on.

Support for the euro was seen around the 2012 low of 82.22 pence, while there was strong resistance to gains for the single currency above 84 pence, near its late December highs. The euro has been stuck in that rough range for nearly two months and analysts said it was unlikely to break out this week, even if Greek talks end well.

"The only thing that will take us out of it is a very positive reaction to the Greek situation. Most likely we will have a deal struck today but we are in the middle of the range," said John Hydeskov, chief analyst at Danske Bank.

"If we were closer to the upper boundary I would be more tempted to say there would be a big impact because there would be some positions triggered in the event of a positive outcome."

MORE QE EXPECTED

Sterling was flat against the dollar at $1.5817, but remained in sight of a 2-1/2 month high of $1.5884 reached last week. It showed little reaction overnight to figures showing the value of UK retail sales on a like-for-like basis was 0.3 percent lower on the year in January.

Better Purchasing Managers' Index data last week eased concerns the UK economy could slip into recession, although market players are still expecting the Bank of England to announce another round of quantitative easing later this week.

Forecasts from economists polled by Reuters centred on 50 billion pounds more being pumped into the economy - effectively flooding the market with more pounds which would be likely to weaken demand.

"GBPUSD (sterling/dollar) rebounds remain selling opportunities, in our view. Should the BoE initiate another round of quantitative easing, as we expect, this may open the door to the downside for GBP," Morgan Stanley strategists said in a note. (Editing by Patrick Graham)