After April gains, pound slips as Brexit, economy weigh

* Graphic: World FX rates in 2020

* Graphic: Trade-weighted sterling since Brexit vote

By Ritvik Carvalho

LONDON, May 1 (Reuters) - Sterling slipped against the dollar on Friday, as stalled Brexit talks and further signs of damage to Britain's economy from the coronavirus pandemic took some shine off the currency's gains in April.

A source close to Britain's negotiating team said the country was confident it can get a deal on future ties with the European Union if Brussels started treating it as an independent negotiator.

But, underlining what sources in Brussels say is an impasse at talks since Britain left the EU in January, French officials later reiterated the 27-nation bloc's position that London must make concessions for a deal to be reached this year.

The two sides have been unable to find any compromise on three main areas - the so-called level playing field guarantees of fair competition, governance and fisheries policy, according to the sources in Brussels and London.

Despite the coronavirus outbreak, Britain has said it will not ask for an extension to this year's transition period.

Negotiators have until the end of the year to negotiate a trade deal.

By 0753 GMT, sterling was down 0.3% against the dollar at $1.2558.

Against the euro, it was down 0.34% at 87.23 pence.

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Sterling registered a 1.4% gain against the dollar in April, rallying hard last week. But with speculators turning negative on the pound for the first time since December 2019 , analysts say the currency's near-term future looks gloomy.

"Cable (sterling-dollar) has enjoyed a healthy rally over the last week but may struggle to break through $1.2650," strategists at ING said in a note.

"Brexit intransigence between the UK (no transition extension) and the EU (UK has to request any extension by end June) may take its toll on sterling over coming weeks."

Economic surveys in the UK didn't help sentiment.

British factory output risks falling by more than half during the current quarter after 80% of manufacturers reported a collapse in orders due to the coronavirus outbreak, trade body Make UK said.

Story continues

A final reading of the country's manufacturing purchasing managers' index by IHS Markit is due at 0830 GMT.

Britain's housing market is grinding to a halt as a result of the government's coronavirus lockdown, mortgage lender Nationwide said, adding its ability to carry on producing the price index depended on there being enough transactions.

Prime Minister Boris Johnson said on Thursday Britain was past the peak of its coronavirus outbreak and promised to set out a plan next week on how it might start gradually returning to normal life. (Reporting by Ritvik Carvalho; Editing by Mark Potter)

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