FOREX-Dollar set for best week in a month as sterling nurses losses

* Greenback set for best week in a month
* Pound heads for worst week in over two years
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Dhara Ranasinghe
LONDON, Dec 20 (Reuters) - The dollar was largely steady
against other major currencies on Friday but set for its best
week in a month thanks to a stronger tone to economic data.
Sterling, which has taken a beating from renewed concern
over a hard Brexit, was set for its worst week in over two years
against the greenback. Against the euro, the pound was poised
for its largest weekly loss since July 2017.
Trade was generally subdued ahead of the Christmas and New
Year holiday period.
A final reading of U.S. economic growth in the third
quarter, due out later, was expected to get some attention.
Data this week has fueled expectations that the U.S. Federal
Reserve is unlikely to cut interest rates again in the near
future, bolstering the dollar.
The dollar index was a touch firmer at 97.41 .DXY . It has
recovered almost 0.9% from five-month lows hit last week and is
up 0.3% this week, poised for its biggest weekly rise in a
month.
"We've held a constructive view on the dollar for two years
and expect it to hold relatively steady in the first half of
next year, then weaken against the euro as we think the Fed will
have to cut rates again," said Piotr Matys, a currency
strategist at Rabobank.
The euro was flat at $1.11210 EUR=EBS , while the dollar
was a touch firmer at 109.39 yen JPY=EBS .
The Chinese yuan CNH= held just on the strong side of the
symbolic 7-per-dollar as China's unveiling of new tariff
exemptions on U.S. chemical and oil product imports supported
optimism about the Sino-U.S. trade detente. China kept its lending benchmark rate unchanged on Friday,
but markets widely expect further monetary easing in 2020 to
arrest an economic slowdown. Britain's pound steadied, nursing heavy losses. It was 0.15%
firmer at $1.3023 GBP=D3 and at 85.40 pence per euro
EURGBP=D3 .
More than three years since Britain voted to exit the
European Union in a 2016 referendum, Prime Minister Boris
Johnson's government will leave the political bloc at the end of
January and has set Dec. 2020 as a hard deadline to reach a
trade agreement, knocking sterling. Just a week ago the pound had shot up as a resounding win
for Johnson's Conservative Party in a national election boosted
hopes that near-term Brexit uncertainty would end.
"The market was always a little bit naive in a way to think
that a Tory election win was going to remove the fog of Brexit,"
said Ray Attrill, head of FX strategy at National Australia
Bank. "There were obviously some longs in weak hands that got
forced out."