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Sterling steadies after four days of falls, PM Johnson in N.Ireland

* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv

By Sujata Rao

LONDON, July 31 (Reuters) - Sterling steadied on Wednesday after four days of steep losses, rising 0.2% against the dollar, though it was on track for its biggest monthly fall since November 2016 as investors price in the increased risk of a no-deal Brexit.

Few expect the pound's respite will last long, given new Prime Minister Boris Johnson's reiterations of his commitment to take Britain out of the European Union by the Oct. 31 deadline regardless of whether transition trading agreements are in place.

The currency has fallen more than 4% this month to the dollar and is down 8% since early May as more investors started to price a no-deal outcome which had earlier been considered highly unlikely.

It rose on Wednesday all the way to $1.2175, having touched 28-month troughs this week at $1.2120. Versus the euro likewise, it inched 0.1% higher to 91.7 pence, off the 22-month low of 91.88 pence hit on Tuesday .

The pound is set for a third straight, lossmaking month versus the single currency.

Justin Onuekwusi, a fund manager at Legal & General Investment Management, says the pound has become undervalued and is looking to "nudge up" sterling exposure in his portfolios.

But he is currently neutral on the currency and reckons the pound will be in thrall to Johnson until parliament reconvenes in September.

"Johnson has just come in so he has to talk tough especially as he has a Brexiteer cabinet. Plus parliament is on recess so there's no one to rebuff (pro-Brexit politicians). The 'Remainers' have gone quiet as they are on holiday," he added.

The currency could see moves later in the day, as Johnson is visiting the province of Northern Ireland whose border with EU member Republic of Ireland has been the main sticking point in Britain's talks with the bloc.

While all sides oppose the return of a hard customs border between the two, hardline Brexiteers are staunchly against the so-called "backstop" which would see the UK adhere to some EU customs arrangements while a long-term deal is thrashed out.

The head of Sinn Fein, Northern Ireland's largest nationalist party, said on Wednesday London would have to offer a referendum on Northern Ireland splitting from the United Kingdom if the government pursues a so-called hard Brexit.

In the meantime, options markets implied a degree of calm: three-month options, a contract expiring around the Oct 31 Brexit deadline, stayed around the 11 vols level hit on Tuesday . (Reporting by Sujata Rao; Editing by Andrew Cawthorne)