FOREX-Euro steady as U.S. dollar set for worst week since October

* Dollar falls to one-month low vs basket of currencies
* New Zealand dollar surges to four-month high
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Olga Cotaga
LONDON, Dec 6 (Reuters) - The euro was steady against the
dollar on Friday, though the greenback was headed for its worst
week since mid-October, dragged down by nervousness around
U.S.-China trade relations and hints of weakness in the U.S.
economy.
The resurgent kiwi enjoyed a hefty recovery thanks to some
renewed risk appetite, as well as due to positive domestic
factors.
Against a basket of six currencies, the greenback fell to a
one-month low of 97.355 .DXY . The euro was last flat at
$1.1106 EUR=EBS .
Sterling was 0.2% weaker at $1.3132 GBP=D3 and 84.58 pence
against the euro EURGBP=D3 , but parked close to a 2-1/2-year
high as traders grow more confident the uncertainty over Brexit
could soon be over.
Opinion polls suggest the Conservative Party of Prime
Minister Boris Johnson is on course for a majority on Dec. 12 to
push through the Brexit deal he struck with the EU after the
bloc granted a third delay to a divorce that was originally
supposed to have taken place at the end of March.
U.S. President Donald Trump remained upbeat overnight on
trade and said talks are "moving right along" and that "we'll
have to see" about the increase in tariffs that is scheduled to
take place on Dec. 15.
But markets were unconvinced, with worries stemming from a
lack of similar enthusiasm from China, keeping the dollar
subdued.
Chinese officials reiterated their stance that some U.S.
tariffs must be rolled back for a deal to end the 17-month trade
war between the two powers, something Washington has given no
sign of doing. Still, risk sentiment recovered somewhat, pushing the New
Zealand dollar to a four-month high of 0.6568 against the U.S.
dollar NZD=D3 .
"My guess – and it's just a guess – is that the rally in NZD
may have started with a recovery in risk sentiment" driven by
Trump's comments, said Marshall Gittler, strategist at ACLS
Global, noting the kiwi tracked the safe-haven Japanese yen's
performance on Thursday.
The currency also got a boost from Reserve Bank of New
Zealand Deputy Governor Geoff Bascand saying in a Bloomberg
interview that the latest economic developments are "supportive
of the story that we're near or around that turning point" in
the economic cycle, Gittler said.
U.S. non-farm payrolls data due at 1330 GMT comes after
dismal numbers showed weak private payrolls, soft services
activity and a shrinking manufacturing sector.
A Reuters poll shows a forecast of 180,000 jobs being added
in November, and a miss might leave the Fed reconsidering its
wait-and-see mode when the committee meets on Tuesday and
Wednesday.
"Markets are in a highly fragile condition at the moment,"
said Michael McCarthy, chief market strategist at CMC Markets in
Sydney.
"So there is a greater potential for an exaggerated move if
we see a big divergence from expectations," he said. "The risk
is in both directions ... below 150,000 or above 210,000 we
could see a significant market reaction."