FOREX-Dollar stands tall as upbeat U.S. data trims Fed cut bets

* Dollar tracks toward highest weekly close vs yen since May
* Pound gains as Johnson firms in polls
* Other majors mostly rangebound, awaiting trade news
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Tom Westbrook
SINGAPORE, Nov 29 (Reuters) - The dollar headed for its
highest weekly finish against the safe-haven yen since May on
Friday, as data showing the U.S. economy on a firm footing
prompted investors to scale back rate-cut bets.
Nerves persisted though, as other major currencies spent the
week rangebound, navigating a blizzard of trade-war headlines
that offered few clues as to when or how an overdue truce might
be agreed between Washington and Beijing.
"There seems to be pretty good optimism around the trade
talks going on between U.S. and China," said William O'Loughlin,
a portfolio manager at Rivkin Securities in Sydney.
"Though as we know that can change on a dime...the rally
doesn't feel like a euphoric, super-bullish rally, it does feel
like climbing the wall of worry."
On Friday, the dollar was steady at 109.51 Japanese yen
JPY= , and if it holds there will post a 0.7% gain for the week
and hit its highest weekly close since May 31. Overnight trade
was light with U.S. desks closed for Thanksgiving.
The British pound GBP= has been the week's other main
beneficiary, adding half a percentage point as Prime Minister
Boris Johnson's Conservative Party has firmed in opinion polls
ahead of the Dec. 12 election. Sterling was steady on Friday at $1.2910, while the euro
EUR= held at $1.1012.
"The market has come to the view that this is Johnson's
election to lose now," said Chris Weston, head of research at
Melbourne brokerage Pepperstone, with expectations he can win
with a large margin.
"That said, should any polls call this margin into question,
where invariably there will be one or two, then GBP could see a
sharp sell-off, although I would be using that weakness to buy."
The dollar's strength this week has drawn on hopes that the
United States and China are indeed in the process of negotiating
a ceasefire in their damaging tariff war, and strong U.S.
economic data.
China has vowed to impose "firm countermeasures" after
Trump's approval of a bill backing Hong Kong's pro-democracy
protesters on Wednesday, but is yet to indicate whether they
would have any bearing on trade talks. U.S. growth picked up slightly in the third quarter, data
showed on Wednesday, in contrast to other indicators showing a
slowdown in global activity.
The Fed also flagged an upbeat outlook amid signs of labour
market strength and a possible turnaround in business
investment. That prompted a pullback on rate cut bets for this year and
next, with the market now pricing in a 5% chance the Fed will
hike rates next month and mostly expecting it to hold steady.
FEDWATCH
The strong greenback has Australian dollar AUD= slightly
weaker for the week, but steady on Friday ahead of a central
bank meeting on Tuesday, where the market has priced an 11%
chance of a cut in interest rates to a record low 0.5%.
It last traded at $0.6767, not far above a six-week low hit
on Thursday.
The New Zealand dollar NZD= was flat on Friday at $0.6418
and held its ground for the week, buoyed by rebounding business
sentiment. China's yuan CNH= was steady at 7.0287 per dollar in
offshore trade.