* Pound at 10-day low after May comments on Irish border
* Retail sales weaker than expected, also weigh on currency
* Graphic: World FX rates in 2018
* Graphic: Trade-weighted sterling since Brexit vote (Writes through after May comments, updates prices)LONDON, Oct 18 (Reuters) - The pound fell to intraday lowsin late Thursday trade, as summit talks in Brussels failed toresolve a Brexit standoff between London and the EU over thestatus of the Irish border, an issue playing an increasinglydominant role in negotiations.
Prime Minister Theresa May said late in the day that asolution to the impasse might come through the option ofextending the Brexit transition period.But that failed to lift the British currency from lows hitafter she earlier said European Union proposals for avoiding ahard Irish border were unacceptable. Sterling fell as low as $1.3057, down 0.4 percenton the day, from near $1.31 before May spoke, and dropped 0.3percent versus the euro to 88.03 pence .Tim Graf, State Street Global Markets' EMEA Head of MacroStrategy, said that despite the pound looking "very cheap"Brexit remained a major risk."The market seems very complacent about the headlines whichreally don't look constructive," he said.European Council President Donald Tusk said on Thursday thathe was sure EU leaders would respond positively to any requestfrom Britain for a longer transition period. Elsa Lignos, global head of FX strategy at RBC, said alonger transition period made the need for a 'backstop' onIreland - a proposal aimed at avoiding a hard border - lesslikely."It remains to be seen if Brexiteers in her party can bepersuaded to sign on," Lignos said.
RETAIL SALES FALLA flurry of data this week, including the strongest wagegrowth for a decade, have briefly focused traders' attention onthe UK economy and away from Brexit negotiations, althoughinvestors say the pound remains at the mercy of the talks.On Thursday, data showed UK retail sales fell by the most insix months in September. The sales volumes dropped by 0.8 percent in September fromAugust - a bigger fall than economists had expected in a Reuterspoll - after the largest decline in food purchases since October2015, official data showed."We've had three data points from the UK in the last threedays with only the unemployment figures providing any realsupport for the pound," David Cheetham, chief market analyst atbroker XTB, said.
"Despite this, sterling continues to keep calm and carry ondespite the obvious Brexit threat with negotiations on thisfront clearly not progressing as many would've hoped."
(Reporting by Tommy Wilkes and Sujata RaoEditing by Robin Pomeroy and Susan Fenton)