RTRS:Sterling jumps vs dollar after summit action on debt
* Pound climbs 1 pct vs dollar as risk rallies
* Strong resistance expected $1.57, $1.5750
* Investors position for BoE asset buys next week
By Michelle Chen
LONDON, June 29 (Reuters) - Sterling rallied against the dollar on Friday after European leaders agreed measures to try to cap weaker euro zone nations' borrowing costs, boosting demand for perceived riskier currencies.
At a two-day meeting that started on Thursday, policymakers also agreed to create a single supervisory body for the euro zone's banks ID:nL6E8HT094]
The action surprised many investors who were braced for an action-free summit given apparent discord between Germany and other states in the currency bloc.
"Sterling is looking quite perky against the dollar because there is more risk appetite as the Germans are more flexible," said Richard Wiltshire, chief FX broker at ETX Capital.
The pound rose more than 1 percent to $1.5680, its highest level in a week, with resistance expected around the 200-day moving average at $1.5750.
ETX Capital's Wiltshire said $1.57 would also be a big resistance level and investors may be tempted to sell into rallies unless there was more good news from the summit.
Market players questioned whether the summit had thus far addressed structural problems in the euro zone and said more clarity on the emergency measures agreed overnight was needed.
The euro rose 0.3 percent against the pound to 80.40 pence, having reached a session high of 80.89 pence during Asian trade.
With no major UK data scheduled for Friday, analysts said moves in the pound would be dominated by developments in the euro zone.
Investors were also looking ahead to a Bank of England meeting next week, at which policymakers are expected to announce another round of asset purchases to boost growth.
Some analysts said speculation of more quantitative easing (QE) could weigh on sterling.
"We still tend to see sterling as vulnerable given its linkage to the euro zone economy and the approach of more QE next week, particularly against risk positive currencies where rate hikes are more possible in a less worried world," said Lloyds strategists in a note. (Editing by John Stonestreet)
