Sterling rises as King cools hopes of further QE
* BoE King's speech adds to doubts over more QE
* Poor euro zone data weighs on euro/sterling
* Markets to shift attention to Thursday's UK GDP data
LONDON, Oct 24 (Reuters) - Sterling edged higher on Wednesday after Governor Mervyn King said the Bank of England would have to think "long and hard" about pumping any more cash into the economy, dampening hopes of clearer support for more stimulus.
Unorthodox methods used by the BoE to prop up the economy were reaching their limits of effectiveness according to King and markets took his comments as a sign that further quantitative easing (QE) in November was not a done deal.
QE is generally seen as negative for a currency as it increases its supply.
"People don't expect the economy to do anything other than bump along the bottom and QE is less and less effective," said Kit Juckes, currency strategist at Societe Generale.
"It is a rather gloomy message but there is a first response that maybe one should buy sterling on the back of this after yesterday's fall."
The pound was up 0.1 percent at $1.5965, recovering from a 6-week low of $1.5914 struck on Tuesday, and well below last week's peak of $1.6178.
Preliminary UK GDP data for the third quarter on Thursday are expected to show the economy pulling back out of recession but there is little prospect of more bullish growth.
King also underlined that even if "storm clouds" from the euro zone were fading somewhat, the economy will also now suffer from a slowdown of emerging markets - the world's main engine of growth in recent years.
The pound rose against the euro, with the single currency down 0.5 percent at 81.01 pence, retreating from a 5-1/2 month high of 81.65 pence hit on Monday. It slipped below its 200-day moving average of 81.08 pence, opening the door for some more losses in the near term.
The single currency fell to a one-week low against the dollar of $1.2922 after weaker-than-expected German PMI and sentiment data fuelled concerns about the resilience of the euro zone's largest economy.
Since the euro zone is the UK's largest trading partner, soft data from Europe is likely to drag sterling lower against the dollar. According to a note by Lloyds Bank, should UK GDP data disappoint, there are few major support levels for sterling until the $1.58 area.
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