* Euro at more than five-week high before ECB meeting
* Dollars bulls cut positions after Fed rate signal
* Sterling riding high as voting gets underway
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
LONDON, Dec 12 (Reuters) - The euro stood at five-week highs
on Thursday before new European Central Bank President Christine
Lagarde's first policy meeting, after the Federal Reserve's
forecast that it would hold rates through 2020.
The Fed announcement late on Wednesday, which followed its
decision to leave rates unchanged, sent the dollar to its
weakest since early August.
Traders will scrutinise Lagarde's every word for her take on
the ECB's latest stimulus plans, introduced in September, and
the bank's economic forecasts. But analysts doubt the ECB
meeting will dislodge the euro from the narrow trading range
it's been in through 2019.
"The potential for the euro to strengthen is linked more to
the improving euro-zone economic data flow rather than any
immediate adjustment in ECB policy," MUFG analysts said.
"Positive economic surprises are currently running at the
highest level since early in 2018".
The euro was up 0.1% at $1.1136 EUR=EBS from Wednesday's
high of $1.1145, the strongest since early November.
The dollar fell against a basket of currencies, its index
falling 0.3% to 97.038 .DXY , a four-month low.
Investors were also on edge ahead of Sunday's deadline for a
new round of U.S. tariffs on China.
Fed Chairman Jerome Powell said the economic outlook for the
U.S. was favourable, though the Fed forecasts only moderate and
slowing growth through 2020 and 2021. New economic
projections showed 13 of 17 Fed policymakers foresaw no change
in interest rates until at least 2021.
The Japanese yen held on to most of its overnight gains at
108.61 JPY=EBS .
"The Fed has basically given the market confirmation that
the three rate cuts we've had recently are not going to be
reversed any time in the next year," said Stuart Oakley, global
head of flow FX at Nomura in Singapore.
Among those benefiting from the U.S. dollar's slide were the
Australian AUD=D3 , New Zealand NZD=D3 and Hong Kong dollars
HKD=D3 - the latter rose to its highest since July - as well
as some emerging-market currencies.
Sterling rose to its highest since March at $1.3229
GBP=D3 , amid dollar weakness and confidence Britain's
Conservative Party will win a majority in Thursday's election.
A majority would give Prime Minister Boris Johnson's party
control of parliament and enable him to lead Britain out of the
European Union at the end of January. Anything short of that
could prompt a slide in the British currency.
Sterling/dollar overnight implied volatility has soared to
its highest since the 2016 Brexit referendum GBPONO= .
Voting ends at 2200 GMT, with exit polls and early results
due after that. Traders expect an outcome as early as 0300 GMT
on Friday.