UPDATE 1-Sterling close to biggest weekly loss since 2017

Elizabeth Howcroft

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

* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv (Updates prices, adds detail, quotes, GDP, BoE governor decision)

LONDON, Dec 20 (Reuters) - The pound rose 0.3% on Friday after three days of declines, but nonetheless close to its biggest weekly loss since 2017, before the UK parliament votes on Prime Minister Boris Johnson's European Union exit deal.

The Withdrawal Agreement Bill, which is expected to pass because last week's general election secured Johnson a large majority, is a mixed bag for pound traders.

It creates some certainty in that it fixes the departure date as Jan. 31. But it also revives the risk of a no-deal Brexit because it bans any extension of the December 2020 negotiating period.

"The British government is likely to resume control in this matter. And as far as Johnson is concerned that could also mean a hard Brexit if push came to shove - that is certainly what he has said on numerous occasions," Commerzbank FX strategist Thu Lan Nguyen wrote in a note to clients.

The pound was last up 0.3% versus the dollar at $1.3048, having slipped below $1.30 in overnight trading. Against the euro it was up around 0.2% at 85.22 pence .

It has fallen more than 2% this week, having lost all its election-night gains.

"Johnson is determined to leave the EU and could do that without a trade agreement in place, so this has re-ignited concern about a hard Brexit," said Piotr Matys, an FX strategist at Rabobank.

Chris Graham, senior economist at Standard Chartered, said that the fact that Johnson ruled out an extension when under no political pressure to do so caught markets off-guard.


The pound was little changed by data showing that the UK GDP gross domestic product grew 0.4% in the third quarter, an upward revision from the previous estimate of 0.3%.

The Bank of England kept rates steady on Thursday, saying it was too soon to tell how much Johnson's election victory would lift the Brexit uncertainty that has clouded the economy.

"I think sterling could start to do better again if we see signs of stronger economic data and progress in UK-EU negotiations on the future relationship," Standard Chartered's Graham said.


Andrew Bailey was announced as the new Bank of England governor. The 60-year old former deputy governor is due to take over from Mark Carney on March 16, later than originally planned. Sterling did not move on the news.

George Buckley, chief European economist at Nomura, noted that the role goes beyond monetary policymaking: "Financial regulation could be a big part of the next year for him, given that there's going to be a lot of debate about any deal (with the EU) that can be had."

"He's a solid choice - there's no doubt about that," he said.

(Reporting by Elizabeth Howcroft; graphic by Dhara Ranasinghe; editing by Larry King)