* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
* Traders pause to re-assess risks to global outlook
* U.S.-China trade deal proves illusive
* Sterling in narrow range before BoE, general election
By Stanley White
TOKYO, Nov 7 (Reuters) - The dollar inched lower against the
yen on Thursday as lingering doubts about when the United States
and China will sign a preliminary trade deal discouraged traders
from taking big positions.
Sterling traded near a one-week low before a Bank of England
meeting later on Thursday. No change in policy is expected, but
investors are focused on how the BoE will respond to
uncertainties posed by Britain's fraught exit from the European
Union.
Traders are also awaiting results of a general election on
Dec. 12, which will determine whether the ruling Conservative
Party can capture a majority in Parliament and conclude Brexit
by the Jan. 31 deadline.
The dollar was caught off-guard on Wednesday after a senior
official in U.S. President Donald Trump's administration told
Reuters the signing of a so-called "phase one" trade deal could
be delayed until December.
Trump had previously indicated an agreement could be signed
this month.
Many investors remain nervous about the risks to the global
outlook given the Sino-U.S. trade war and Brexit show no signs
of a quick resolution.
"The dollar is looking for direction," said Takuya Kanda,
general manager of the research department at Gaitame.com
Research Institute in Tokyo.
"The main catalyst for dollar buying was expectations that a
U.S.-China trade deal is signed this month. If that is delayed
by one month, that is not such a disappointment, but we need to
see what the Chinese government has to say."
The dollar fell 0.17% on Thursday to 108.80 yen JPY=EBS .
The United States and China have imposed tariffs on each
other's goods in a 16-month long trade war that rippled across
financial markets, slowed global investments and growth.
Investors hope a preliminary trade agreement rolls back at
least some of the tariffs, but negotiations between Washington
and Beijing have been fractious, making an agreement far from
certain.
In the onshore market, the yuan CNY=CFXS fell to 7.0124
per dollar, extending its pull back from a 2-1/2 month high of
6.9880 per dollar reached on Tuesday as optimism about a
near-term resolution to trade frictions wanes.
The dollar index .DXY against a basket of six major
currencies was steady at 97.962.
The pound GBP=D3 traded a $1.2851, close to the lowest
since Oct. 29. Against the euro EURGBP=D3 , sterling was quoted
at 86.13 pence, hemmed into a narrow range.
The consensus view among economists in a Reuters poll is for
the BoE's Monetary Policy Committee to vote 9-0 to keep the Bank
Rate at 0.75%. British inflation is near the BoE's 2% target and the
central bank's updated forecasts on Thursday are likely to show
it is expected to go higher over the next two to three years,
normally a sign that the BoE thinks rate rises will be needed.
With a snap election due on Dec. 12 and a new Brexit
deadline on Jan. 31, expectations are that Governor Mark Carney
will steer away from giving an explicit steer on where interest
rates are heading.
However, a minority of economists are betting one
policymaker will cast the first vote for a rate cut since
borrowing costs were lowered in August 2016, shortly after
Britain voted to leave the EU, as uncertainty about Brexit poses
risks to growth.
The euro EUR=D3 was quoted at $1.1065, little changed on
the day following a mild 0.07% decline on Wednesday.
Data due later on Thursday are forecast to show German
industrial output fell 0.4% in September after a 0.3% increase
in the previous month.
Recent factory surveys have shown Germany's manufacturing
sector slipping into recession. Further disappointing data from
Europe's largest economy is likely pressure the single currency.