* Sterling rallies on euro zone data contrast with UK * Construction PMI data eases Q1 GDP concerns * Pound dips vs dollar, support seen at $1.6167 By Nia Williams LONDON, May 2 (Reuters) - Sterling hit a 22-month high against the euro on Wednesday after UK construction data exceeded expectations while the euro zone manufacturing sector contracted further and unemployment rose, highlighting the divergence between their economies. The data fuelled safe-haven demand for the pound, which has rallied strongly against the common currency in recent months as investors diverted portfolio flows from the indebted euro zone to triple-A rated UK government bonds. The euro dropped 0.5 percent on the day to 81.13 pence, its lowest level versus sterling since June 2010, and triggering reported stops around 81.20 pence. Technical analysts said the next target was the 2010 low around 80.67 pence. Gains against the euro pushed the pound closer to a 32-month high versus a basket of currencies of 83.6 that was hit on Monday. Trade-weighted sterling was last up 0.2 percent at 83.5 according to Bank of England data. "We have seen more supportive news for sterling to digest while on the other side of the trade we had pretty dreadful unemployment figures and the Italy PMI was also a big jump lower," said Audrey Childe-Freeman, head of EMEA currency strategy at JP Morgan Private Bank. "The macro elements are adding to a positive outlook for sterling and the safe-haven argument." UK construction PMI for April eased from the previous month to 55.8 but beat forecasts of a fall to 54.0. Investors were cheered by the solid figures as a slump in construction output was one reason behind the economy's contraction in the first quarter. The construction data soothed some concerns about the fragility of the UK economy after manufacturing data disappointed on Tuesday, and raised expectations of a decent PMI reading from the dominant services sector on Thursday. UK mortgage approvals and consumer credit data also came in above forecasts. In contrast, euro zone PMI data showed manufacturing declined further, with Italy's reading slumping to 43.8. Meanwhile, while euro zone unemployment rose to 10.9 percent, equalling the record high of 15 years ago. INFLATION STICKY Investors have largely shrugged off last week's drop in UK first quarter GDP as concerns about the euro zone debt crisis and speculation about more quantitative easing by the U.S. Federal Reserve fuelled demand for the pound. Persistently high UK inflation has also supported sterling by prompting investors to pare back bets that the Bank of England will loosen policy any further. "The market is still embracing recent comments from BoE speakers who are worried about the stickiness of inflation," said Paul Robson, currency strategist at RBS. Sterling dipped 0.15 percent against the dollar to $1.6194 in choppy trade, tracking the euro lower as poor euro zone data boosted demand for the safe-haven greenback. Commerzbank technical analysts said there was support for the pound around $1.6167, the October 2011 high. (Editing by Hugh Lawson)

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