Australia retail sales slip, add to rate doubts

* Retail sales -0.2 pct in Sept vs forecast +0.4 pct

* Building approvals +2.7 pct, much as expected

* Adds to doubts about a rate hike in December

By Wayne Cole

SYDNEY, Nov 4 (Reuters) - Australian retail sales fell unexpectedly in September to set the seal on a soft third quarter

-- payback for fiscal-driven strength earlier in the year, which -- payback for fiscal-driven strength earlier in the year, which adds to doubts about the need for a near-term rate rise.

The Australian dollar AUD= slipped a third of a U.S. cent while interest rate futures edged up as investors rowed back on bets the Reserve Bank of Australia would raise rates in December.

"The sales figures are certainly an indication of policy fade coming through," said Michael Blythe, chief economist at Commonwealth Bank. "These numbers won't stop future rate rises but the odds on a move in December are starting to lengthen."