* Sterling supported vs dlr on corporate buying * Euro/stg at 2-wk high on reported EZ sovereign buying * CBI survey weak, but close to market expectations By Anirban Nag LONDON, Aug 25 (Reuters) - Sterling eased to a two-week low against the euro on Thursday as an euro zone sovereign bought the common currency for month-end requirements, while it held steady against the dollar on buying by corporates and some Asian central banks. The pound barely reacted to a weak CBI survey that showed British retail sales fell at their fastest pace in over a year, underlining the fragility of the UK recovery. A bleak number was expected and the reading did little to alter expectations that consumer demand will be sluggish. . "The CBI survey was pretty close to expectations which is why we did not have too much of a reaction on sterling," said Adrian Schmidt, FX strategist at Lloyds TSB. "We heard some sovereign buyers in the euro/sterling cross which probably drove the euro higher." Against the euro, sterling eased to a two-week low. The common currency was up 0.25 percent at 88.25 pence , hovering just above its 55-day moving average which comes in at 88.22 pence. Traders cited downside stops at 87.95 pence. Investors were wary of building long positions in the pound ahead of a speech by Federal Reserve President Ben Bernanke at Jackson Hole, Wyoming on Friday. Investors believe Bernanke may use the speech to signal further monetary stimulus to prop up the U.S. economy, although many analysts say markets are over-positioned for that prospect. Such doubts have given the dollar some support, especially against the yen . Sterling which hit a session high of $1.6398 on decent-sized corporate demand that took it through stops at $1.6380 early in the London session, was last trading at $1.6370, steady on the day. It had fallen to a session low of $1.6352 earlier in Asia on some selling by real money investors and model funds, traders said. Near-term support is seen at its 100-day moving average which stood at $1.6294 on Thursday, while upside resistance is around $1.6480 -- a high struck on August 16. FLOWS DRYING UP Sterling has been an outperformer of late, soaring to a 3-1/2 month high of $1.6618 last week on merger and acquisition flows and a rise in foreign participation in UK gilts on the back of euro zone debt problems and U.S. sovereign worries. But those inflows seem to be waning, and this is likely to see sterling come under pressure, given the UK economy is also struggling and rate hike expectations have been pushed back into late 2012. Traders said the pound remains at risk of selling if data continues to show the economic recovery is stuttering, which would increase speculation that the Bank of England may opt for more "quantitative easing" stimulus. "As long as (sterling) trades below $1.6500, we expect a move to $1.63. However a short-term bounce cannot be ruled out and will most likely be seen as a selling opportunity by traders," said Alejandro Zambrano, currency strategist at FXCM. Data released earlier in the day showed British consumer confidence edged down further in July, according to a survey by Nationwide. . Monetary policy committee member Martin Weale, who changed his vote away from a rate hike at this month's BOE policy meeting, will be delivering a speech later in the day and could give clues on whether he is veering towards a more dovish bias. (Editing by Patrick Graham, John Stonestreet)

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