* Sterling up 0.3 percent versus dollar at $1.6330 * Markets await Fed speech which could hit dollar * UK GDP second estimate unrevised at 0.2 percent By Neal Armstrong LONDON, Aug 26 (Reuters) - Sterling edged up against the dollar on Friday as traders adjusted positions before a keenly awaited speech from Federal Reserve Chairman Ben Bernanke, while the euro hovered near key resistance against the pound in light trade. The release of the second estimate of UK growth in the second quarter, in line with the initial estimate of 0.2 percent, had no impact on the currency. Bernanke is due to speak at 1400 GMT at Jackson Hole, Wyoming, with markets largely on hold throughout the week to see what policy options he may refer to which could help stimulate sluggish growth in the U.S. economy. "This is not a policy announcement, but if Bernanke says the Fed stands ready to do what is necessary and the market takes that as a reference to more quantitative easing, risk should do quite well and the dollar will sell off to some extent," said Gavin Friend, currency strategist at National Australia Bank. Sterling was up around 0.3 percent against the dollar at $1.6330 , recovering from lows hit in the Asian session of $1.6279. The pound has underperformed somewhat after opening the week around $1.6475, with traders saying M&A flows which had boosted it the previous week looked to have dried up. Technical analysts highlighted channel support around the day's low at $1.6279, with a break below seen opening up a deeper correction towards the 55-day moving average at $1.6224. "The overall range for sterling looks to be $1.6250/1.6750 at present," said Friend. The euro traded with slight gains against sterling at 88.44 pence , with the common currency boosted by Spain's government reaching an agreement with the main opposition People's Party on plans to enshrine limits on the public deficit in the Spanish constitution. Resistance was highlighted at 88.63, the 50 percent retracement of the euro's fall from July to August. The pound has also been hampered by the market's view that UK interest rates are likely to be kept on hold through 2012, with some thinking more quantitative easing may be needed to support the British economy. Bank of England policymaker Martin Weale told a regional newspaper on Friday he does not see any need for quantitative easing at the moment, but does not rule it out, and would engage in further stimulus if the economy worsened substantially. Data showing Britain's economy grew 0.2 percent in the second quarter of this year, unrevised from the initial estimate, did little to alter the view that the economy continues to struggle amid fiscal cuts in the UK and worries over global growth. "The way I would describe this data is a non-event and it doesn't alter our expectations for Q3," said Brian Hilliard, economist at Societe Generale. "In itself the 0.2 percent number does not tell us what the trend is. I think we are going to see a pretty mechanical bounce in GDP in the third quarter to 0.7 or maybe even more, simply because we are making up the loss of the Royal Wedding holiday and the impact that has had on output." he added. (Editing by Toby Chopra)

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