* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
LONDON, Sept 20 (Reuters) - The dollar edged lower on Fridayand was headed for a third straight week of losses asexpectations of a breakthrough in trade tensions betweenWashington and Beijing fuelled a revival in risk appetite.
The losses came after the Federal Reserve cut interest ratsby a quarter-point rate, compounded by a spike in overnight U.S.repo rates this week, which cut into demand for dollars.
Other major central banks, including the Bank of England,the Bank of Japan and the Swiss National Bank, left ratesunchanged this week, disappointing some dollar bulls.
"Other central banks are not in easing mode as the Fed hasbeen this week and hopes of a breakthrough in trade talksbetween the United States and China is also dampening some ofthe safe-haven appeal of the dollar," said Thu Lan Nguyen, aforeign exchange analyst at Commerzbank.
The dollar slipped 0.1% against an index of other currenciesto 98.18, on track for its third consecutive weekly drop.
Markets focussed on U.S.-China trade talks in Washingtonbefore high-level discussions next month. Some signs of progresswere emerging.
"What we're looking at is brewing central-bank divergence,"said Chris Weston, head of research at brokerage PepperstoneGroup in Melbourne. "We're starting to see signs of thatresonating in currency markets."
Sterling was the biggest gainer. European CommissionPresident Jean-Claude Juncker said he thought Brussels couldreach agreement with Britain on its departure from the EuropeanUnion.
Sterling rose 0.5% to a two-month high against the dollarand to 87.87 pence against the euro, afour-month high .
The Australian dollar rose to around $0.6799 butremained near the three-week low it reached on Thursday. The NewZealand dollar fell to $0.6285, its weakest since Sept.3.
(Reporting by Saikat Chatterjee; editing by Larry King)