Sterling rises vs dollar, King comments, Fed awaited

* Sterling rises, dollar struggles before Fed statement * Analysts see upward risks for sterling after Fed * Market awaits BoE King, UK retail survey shrugged off

LONDON, June 24 (Reuters) - Sterling rose against the dollar on Wednesday as the U.S. currency came under broad selling pressure before a policy statement from the Federal Reserve later in the day.

Traders also awaited testimony from Bank of England Governor Mervyn King to the UK Treasury Committee later in the day to see if he would refer to recent signs that the UK economic downturn may be levelling off.

Later in the day, the Fed is widely expected to quell recent speculation of a possible rise in interest rates this year, which analysts say may sting the dollar and benefit the pound.

"Sterling could come under upward pressure as we move into the FOMC, and also if we get confirmation from the BoE that the economy is stabilising, albeit at a weak level," said Stephen Koukoulas, strategist at TD Securities in London.

Traders shrugged off figures showing that UK retail sales in June fell at the same pace as the previous month. The CBI's distributive trades survey sales balance came in at -17, unchanged from May and in line with expectations [ID:nLO264692]

By 1128 GMT, sterling GBP=D4 traded 0.5 percent higher at $1.6540, after rising as high as $1.6605, not far from the year's high of $1.6664 hit early this month.

Boosting the UK currency was corporate demand as well as market chatter that Middle Eastern names were buying the pound, traders said.