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UPDATE 2-Sterling hits 2-week high after BoE comments, dollar weakness

* BoE's McCafferty says rate hike needed

* Pound hits day's high of $1.4188

* Long positions in sterling remain large (Adds context, updates prices)

LONDON, April 10 (Reuters) - The pound rose to a two-week high on Tuesday after the dollar fell and a top policymaker said the Bank of England should press ahead with an interest rate hike to curb inflation.

Economists expect the Bank of England to raise rates in May and the comments by policymaker Ian McCafferty along with strong housing survey data this week offered further encouragement.

A broadly weak dollar and a transition deal Britain signed last month to cover a 21-month period after it leaves the European Union have lifted the pound since the Brexit vote in 2016 sent the currency plummeting.

McCafferty, one of two policymakers on the nine-member Monetary Policy Committee who voted for a rate rise last month, told Reuters in an interview that wage growth might prove stronger than most of his colleagues thought, adding to pressure on inflation that is running above the BoE's target.

"The pound remains bid due to the global backdrop, seasonal demand and Mcafferty's comments," said Neil Jones, head of hedge fund sales at Mizuho Bank Ltd.

Sterling edged higher after McCafferty's interview was published and hit a day's high of $1.4188 against the dollar before easing back slightly.

The greenback dipped to a two-week low against a basket of currencies on Tuesday after Chinese President Xi Jinping's promise to cut import tariffs eased concerns about a trade conflict.

Against the euro, the pound strengthened to 87.15 pence per euro.

The pound, one of the best performing currencies this year, has rallied more than 1.5 percent in the last three trading sessions. Market watchers say a successful break above the $1.4252 line would put sterling on track to test a 2018 high of $1.4346 hit in late January.

Against the euro, sterling has strengthened one percent so far this month after a two percent rally in March.

"This an interesting level technically...recent data and positioning seem to be weighing on the euro," said John Marley, head of FX strategy at Infinity International, a currency risk management firm.

April tends to be a strong month for the British currency because foreign companies send dividend payments to British shareholders, according to recent analysis by Bank of America Merrill Lynch.

Some analysts say that with long sterling bets among the largest futures positions, the market may be vulnerable to a sell-off if economic data surprises to the downside. (Editing by Alexandra Hudson)