FOREX-Euro steady; 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

(Updates prices, adds fresh comment)
By Olga Cotaga
LONDON, Dec 6 (Reuters) - The euro was steady on Friday
against the dollar, which was headed for its worst week since
mid-October by concern over U.S.-China trade relations and hints
of weakness in the U.S. economy.
New Zealand's kiwi rebounded amid renewed risk appetite and
encouraging domestic factors.
Against a basket of six currencies, the dollar fell to a
one-month low of 97.355 .DXY , but was last flat at 97.424. The
euro was little changed at $1.1102 EUR=EBS .
Sterling was 0.2% weaker at $1.3129 GBP=D3 and down 0.1%
against the euro at 84.49 pence EURGBP=D3 , but close to a
two-and-a-half-year high as traders grew more confident
uncertainty over Brexit would end soon.
U.S. President Donald Trump said U.S.-China trade talks were
"moving right along" and that "we'll have to see" about an
increase in tariffs due next week.
"The U.S. market is concerned about the Dec. 15 tariffs
being enacted, but I don't think this is going to happen before
the end of the year," said Shannon Saccocia, chief investment
officer at Boston Private, adding she has not made any
investment decisions that implied the tariffs will be
implemented.
But markets were unconvinced, with worries stemming from a
lack of similar enthusiasm from China, keeping the dollar
subdued. Chinese officials reiterated that some U.S. tariffs
must be rolled back for a deal to end the 17-month trade war,
something Washington has given no sign of doing. Risk sentiment recovered, pushing the New Zealand dollar to
a four-month high of 0.6569 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.
The currency also got a boost from Reserve Bank of New
Zealand Deputy Governor Geoff Bascand, who said in a Bloomberg
interview 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. Anything short of that might leave the Federal
Reserve reconsidering its wait-and-see mode when it meets on
Tuesday and Wednesday.
"There is a greater potential for an exaggerated move if we
see a big divergence from expectations," said Michael McCarthy,
chief market strategist at CMC Markets in Sydney. "The risk is
in both directions ... below 150,000 or above 210,000, we could
see a significant market reaction."