Sterling aided by profit-taking, outlook still poor

* Sterling recovers from one-week low vs dollar of $1.6515

* Stg bounced back from two-week low vs euro * Strategic demand, short covering boost sterling

* Sentiment still negative after BoE chief's QE comment

By George Matlock

LONDON, Nov 13 (Reuters) - Sterling recovered some of its one-week losses against the dollar and two-week losses against the euro on Friday as traders closed short positions in the UK currency ahead of the weekend.

The pound pulled back from a multi-week nadir hit after Bank of England Governor Mervyn King suggested a weak currency would help the UK economy recover. Despite its gains on Friday, analysts said sentiment towards the currency remained negative.

"There is a small reversal in favour of sterling...but sterling has been and will remain volatile because of the continued uncertainty on the British economy and monetary policy," said Geraldine Concagh, economist at AIB Group Treasury in Dublin.

A senior trader in London said sterling was also benefiting from some judicious but strategic buying from investors keen to acquire UK property and bid for British companies.