Sterling steady vs dollar, Greece seen limiting gains

* Sterling steady in aftermath of QE boost

* Greece concerns limit perceived riskier currencies

* UK producer price index data 0930 GMT

By Nia Williams

LONDON, Feb 10 (Reuters) - Sterling was steady versus the dollar on Friday as an improved outlook on UK growth after the Bank of England injected more monetary stimulus into the economy was offset by lingering concerns about a Greek bailout deal.

Many analysts said the pound was performing well despite the increase in quantitative easing, which involves flooding the economy with pounds, but moves in sterling were likely to be dictated by wider market appetite to take on risk.

Developments in Greece remained firmly in focus. Greek political leaders said they had clinched a deal on economic reforms needed to secure a second EU bailout, but euro zone finance ministers demanded more steps and a parliamentary seal of approval before providing the aid.

Sterling was last flat at $1.5809, retreating from a 12-week high of $1.5929 hit earlier in the week, with offers cited around $1.5820 and $1.5840.

The euro dipped 0.1 percent to 83.93 pence, having earlier pushed briefly above 84 pence, its highest level in two weeks.

The Bank of England said on Thursday it would keep interest rates on hold at a record low of 0.5 percent and buy another 50 billion pounds of assets to boost growth.

The stimulus was less than the 75 billion pound injection some in the market had positioned for, and sentiment towards sterling was also supported by a more upbeat statement from policymakers.

"We have a slightly more risk averse environment today but sterling has performed relatively well in the aftermath of QE," said Simon Derrick, head of currency research at Bank of New York Mellon.

"If the BoE had been feeling really grim they would have done 75 billion. It's inherent in the more moderate approach that they were more optimistic about the outlook."

Central bank policymakers said recent surveys painted a more positive picture of the UK. They were also expecting inflation to undershoot 2 percent in the medium term without more monetary support.

UK industrial and trade deficit data on Thursday proved better than expected, adding to the cautious hopes the economy was starting to pick up. Producer price index data at 0930 GMT will also be in focus for any further signs of growth in the UK economy.

"What is significant is that the improvement in economic data means that we could be coming towards the end of the asset purchase programme, which is a positive for the pound," analysts at Commerzbank said in a note. (Editing by Chris Pizzey)