* Sterling slips vs euro, but holds near 16-mth high * Cable holds slight gains, but upside limited by offers * Analysts: Cable fall to $1.50 possible in coming months By Naomi Tajitsu LONDON, Jan 10 (Reuters) - Sterling slipped against the euro on Tuesday as investors trimmed bets to sell the single currency across the board, but the pound hovered near a 16-month high hit the previous day as sentiment towards the euro remained negative. The pound held slight gains versus a broadly struggling dollar, but analysts see a risk of sterling weakness if the safe-haven U.S. currency appreciates as the euro zone debt crisis deteriorates. A weak UK economy could also knock the pound. At the same time, the failure of Germany and France on Monday to produce an immediate solution to contain the effects of the region's debt problems highlighted risks to the euro, which could boost the pound versus the single currency. "I think GBP will stay firm against the euro but whilst holding up against the dollar, eventually the economic problems will start to weigh and we will see Cable lower," said a trader in London. The euro rose 0.2 percent on the day to a session high of 82.81 pence, but it traded in range of 82.22 pence hit on Monday, its weakest since September 2010. Sterling was little changed on the day at $1.5464. In earlier trade, it rose as high as $1.5500, dragged higher by euro/dollar gains. Market participants said the pound was also boosted by demand from UK corporates selling dollar-denominated revenues, but its upward momentum petered out due to offers around the session peak. Many in the market expect the euro will suffer broadly if European officials are seen taking their time on solving the debt crisis, which could push more weak countries towards bailouts or even debt defaults. This would also boost the dollar, analysts said, which would spell more weakness for sterling given that it has been closely tracking moves in the single currency. "We still see more downside in euro/sterling, and it will probably be the same story in Cable," said Peter Kinsella, currency strategist at Commerzbank, adding that a fall in euro/sterling towards 80 pence was possible in the near term. He added that he anticipated Cable to fall to around $1.50 in the coming months, especially if euro/dollar falls below $1.20. BOE AHEAD Some market participants said intermittent corporate demand for euro/sterling was also boosting the pair on Tuesday. Traders added they had been seeing some hedging-related demand for euro/dollar and euro/sterling since the start of the week, following a quiet first week of 2012. Sterling investors are awaiting a Bank of England rate decision on Thursday, seen as the event highlight of the week. Policymakers are expected to hold rates at 0.5 percent and maintain the quantitative easing target at 275 billion pounds. Some analysts see a chance the UK central bank may raise its asset-buying programme in the next few months - which would be sterling negative - if the economy continues to struggle. Still, market participants believe the pound will be supported against the euro as investors flock to UK assets, which are considered a safer alternative to euro zone assets as Britain is seen retaining its AAA credit rating. Data released Tuesday on UK housing showed prices fell at a marginally slower pace in the three months to December, but were expected to fall further. Other data showed a year-on-year jump in UK retail sales growth in December, but the figures were being compared with a period of particular weakness in the sector, when much of the UK was paralysed by snow in late 2010. (Reporting by Naomi Tajitsu; Editing by Catherine Evans)

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