* Equity volatility spooks investors into dollars
* Euro whipsaws after ECB meeting
* Pound heads for worst week since March
* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
By Tom Westbrook
SINGAPORE, Sept 11 (Reuters) - The dollar was poised for its
first back-to-back weekly gains since May on Friday as jitters
in equity markets had investors sticking to safer assets, while
sterling tracked toward its worst week since March on fears of a
messy hard Brexit.
After a volatile New York session, the greenback was broadly
steady in Asia. Marginal moves higher in the Aussie, kiwi and
euro were all too small to dent a bounce in the dollar that came
with Thursday's Wall Street selloff. .N
"It's exhaustion today," said National Australia Bank senior
currency strategist Rodrigo Catril in Sydney, as traders
frazzled by a bumpy week look ahead at risks ranging from next
week's Federal Reserve meeting to U.S. politics and Brexit.
"We think that in this sort of environment of uncertainty
its difficult to see the equity market continue to perform. A
period of turbulence seems more likely, and in that scenario the
dollar tends to find support, or at least struggles to weaken."
Markets are also looking to U.S. consumer price data due at
1230 GMT for an insight into the recovery and to the challenge
facing the Federal Reserve as it looks to lift inflation.
Against a basket of currencies =USD , the dollar was a
touch lower midway through Asian trade, but ahead by about half
a percent for the week. It has now recouped about 1.7% from a
28-month hit low early in September.
The yen JPY=EBS was broadly steady for the week at 106.14
per dollar. Goldman Sachs analysts said pension fund flows out
of Japan had offset a safety bid as U.S. stocks fell.
The Australian dollar AUD=D3 rose 0.3% to head toward a
flat finish for the week at $0.7275, while the New Zealand
dollar edged 0.1% higher to $0.6660. Bond inflows have not been
enough to prevent a nearly 1% dip in the kiwi this week. AUD/
"The dollar looks delicately poised having bounced from
recent lows," ANZ analysts said in a note.
"The Fed still has a mountain to climb if it wants to drive
inflation higher, and the September meeting may provide some
insight on how exactly it plans to do that."
WILD RIDE
Asia's steady session followed wild trade in the wake of
Thursday's European Central Bank meeting and a falling out
between Britain and Europe over Brexit that hammered the pound.
The euro whipsawed, first zooming 1% higher to $1.1917 after
European Central Bank President Christine Lagarde insisted the
bank does not target the exchange rate, before falling back to
around $1.1830 as a U.S. equities slump lifted the dollar.
The Nasdaq .IXIC dropped 2% overnight and has fallen 9.6%
from a record high made on Sept. 2. MKTS/GLOB
Sterling, meanwhile, just fell. GBP/
The European Union told Britain on Thursday it should
urgently scrap a plan to break their divorce treaty.
But Britain has refused to budge and pressed ahead with a
draft law that could sink four years of Brexit talks by fiddling
with agreed-upon arrangements for Northern Ireland. The outcry from Europe sent the pound GBP= to a six-week
low of $1.2773 and it mostly stayed there on Friday, last
trading at $1.2812. It has lost 3.5% on the dollar this week and
about as much against the euro EURGBP= to sit at 92.32 pence.
"The selling was relentless," said Chris Weston, head of
research at brokerage Pepperstone in Melbourne.
"Clearly the pound is wearing a greater political premium,"
he said, adding that near-term volatility gauges had spiked
dramatically.
In emerging markets, the Indonesian rupiah IDR= dropped
nearly 0.7% to a four-month low of 14,920 per dollar as a
planned return to coronavirus social restrictions in Jakarta
unnerves investors. EMRG/FRX