Sterling up on weak dollar, change in BoE gilt buy plan

* Sterling climbs vs broadly weak dollar * Pound supported after changes to BoE guilt buying plan * Sterling appears to have topped out, analysts say

LONDON, June 26 (Reuters) - Sterling rose on Friday, supported by broad weakness in the dollar, while a modification in the Bank of England's asset-buying programme also helped to boost demand for the UK currency.

Helping the pound was a fall in the dollar, which was stung as optimism that the global financial and economic crisis is moderating eroded the U.S. currency's safe-haven appeal.

In addition, the view that U.S. interest rates may stay low for a while prompted some investors to look elsewhere for riskier assets that may offer more returns. Sterling's rise was driven by dollar weakness, analysts said. They added that the pound appears to have hit a ceiling after climbing to its highest of the year against the dollar and the euro this month, but would likely remain supported.

"There's probably not a lot of upside progress to sterling (beyond current levels) but there's no real sterling negative story out there for the moment," said Marc Ostwald, strategist at Monument Securities in London.

By 1341 GMT, sterling GBP=D4 had risen roughly 1 percent to the day's high of $1.6536.

Analysts said that movements were being driven by short-term speculators, while others in the market said that Middle Eastern names were buying sterling against the dollar, having been active in the market all week.

The euro EURGBP=R slipped slightly to 85.40 pence, but traded in a daily range around 85.70 and 85.11 pence, hemmed within its 14- and 21-day moving averages, which some in the market said may suggest more range trading to come.