FOREX-Aussie near 4-1/2-month peak on positive risk sentiment, sterling fragile

* Risk currencies supported by optimism on U.S.-China trade
* British pound near 3-week low on fresh Brexit concerns
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

By Hideyuki Sano
TOKYO, Dec 24 (Reuters) - The Australian dollar held firm on
Tuesday near a 4-1/2-month peak on optimism about U.S.-China
trade relations, while the British pound was on the defensive as
worries resurfaced about a chaotic departure from the European
Union.
The Australian dollar fetched $0.69175 AUD=D4 flat in Asia
but within striking distance of its Dec. 13 peak of $0.6939, its
highest level since late July. The currency has gained over 1%
in the past four sessions.
China said on Monday it will lower tariffs on products
ranging from frozen pork and avocado to some types of
semiconductors next year as Beijing looks to boost imports amid
a slowing economy and a trade war with the United States.
"It is possible to view this news as supporting the Aussie
dollar, but considering that the Aussie has been strong since
last Thursday, we should probably think that it reflects waning
concerns over geopolitical risks," said Tohru Sasaki, head of
research at J.P. Morgan.
Other risk sensitive currencies were also generally
well-supported.
The New Zealand dollar NZD=D4 stood at $0.6625, just below
a five-month high of $0.6639 hit on Monday, while many emerging
market currencies, including the Mexican peso MXN=D4 , the
Indonesian rupiah IDR= and the Russian rouble RUBUTSTN=MCX ,
held near multi-month peaks.
The British pound, however, slipped to three-week lows as
the market braced for more uncertainty after the United Kingdom
officially leaves the European Union in January.
As Prime Minister Boris Johnson has made it illegal to
extend trade talks with the EU beyond the end of next year,
investors fret the country could crash out without any trade
deal.
Other major currencies moved little in holiday-thinned trade
on Tuesday.
The euro stood almost flat at $1.1087 EUR= while the yen
was little changed at 109.40 yen per dollar JPY= .
The dollar index =USD stood at 97.689, off Monday's high
of 97.820.
The dollar showed a limited response to a soft reading in
new orders for key U.S.-made capital goods.
Orders for non-defense capital goods excluding aircraft, a
closely watched proxy for business spending plans, edged up just
0.1% in November, slightly below market expectations.
U.S. capital expenditure is likely to stagnate in coming
months after Boeing BA.N announced last week it would suspend
production of its best-selling 737 MAX jetliner following two
fatal crashes of the now-grounded aircraft.
The firm's failure to resolve its crisis led it to oust
Chief Executive Dennis Muilenburg on Monday.