* Sterling slips vs dollar, tracks euro on debt pessimism * Pound off 1-yr low vs dollar, may rise on month-end demand * Analysts: Sterling to stay pressured on QE speculation By Naomi Tajitsu LONDON, Sept 27 (Reuters) - Sterling slipped against the dollar on Tuesday, tracking a weaker euro as investors speculated that euro zone policymakers may take a less proactive stance on dealing with the region's debt crisis than some in the market had hoped. The pound suffered versus the dollar after Spanish Economy Minister Elena Salgado said an expansion of the euro zone's bailout fund to 2 trillion euros was not on the table, dousing anticipation that euro zone officials would add more fire-power to its bailout fund. Sterling has recovered from a one-year low hit versus the dollar last week, but it may face more selling pressure due to rising speculation that the Bank of England may implement more monetary stimulus before year-end to boost the struggling economy. In the shorter term, analysts said euro weakness was a drag on sterling on Tuesday but they added it may have room to rise as the month winds down as money managers who are likely overweight dollars may pick up the pound after its broad sell-off in past weeks. "Although month-end flows are usually not that friendly to Cable, there is potential for there to be some sort of exception this month," said Michael Derks, strategist at FXPro. "Rebalancing flows in the next few days are likely to be sterling positive than sterling negative ... I am inclined to see cable higher towards $1.58." Sterling traded at $1.5560 in early London trade, not far from a session low of $1.5531. Despite Tuesday's selling, the pound hovered above $1.5326 hit late last week, its lowest since September 2010, when investors fled to the safety of the dollar on growing speculation that Greece might default on its debts. Analysts say the UK currency has entered a new range of $1.50-1.60, after rising speculation of more QE pushed it out of the $1.60-1.67 range it traded in for much of the year. The euro was a touch lower on the day at 86.90 pence, hovering within range of a six-month low of 85.31 pence hit earlier in the month. The single currency faces more downside pressure after it has made a decisive break below 87.08 pence, its 200-day moving average, which was seen as key technical support. QE RISKS Sterling has tracked falls in the euro against the dollar on escalating worries that debt problems in weaker euro zone countries may spread to stronger ones, and traders expect further euro losses will limit any upside in the UK currency. Downward pressure has also increased after minutes from the latest Bank of England policy meeting released last week flagged a greater readiness to ease monetary policy more. This would be negative for sterling, as it would require the BoE to print pounds and flood the market with the currency, swamping demand. "We still have QE looking like a possible outcome in the UK in October or November, along with a challenging fiscal environment, which could be negative for sterling," said Audrey Childe-Freeman, currency strategist at JPMorgan Private Bank. BoE policymaker Ben Broadbent on Monday fuelled the view the central bank is mulling more QE when he said the UK economy would not have to weaken much more to warrant more stimulus. Sterling has tumbled from around $1.66 seen only a month ago, dragged down by QE speculation and concerns about the euro zone debt crisis. Childe-Freeman said she saw the possibility of Cable falling towards $1.50 before year end if the BoE adds to its asset-buying plan. Derks at FXPro had a similar view, adding there was a chance the BoE would increase the 200 billion pound plan by an additional 100 billion pounds. (Reporting by Naomi Tajitsu; Editing by John Stonestreet)

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