FOREX-Dollar flat as investors look to inauguration

* Dollar flat as investors await Trump inauguration speech

* Market volumes limited, leading to choppy trade (Updates to U.S. market open, adds data, quote, changes dateline, previous LONDON)

By Dion Rabouin

NEW YORK, Jan 20 (Reuters) - Market uncertainty ahead of the inauguration of U.S. President-elect Donald Trump kept the dollar muted in choppy trading on Friday after a volatile week that underlined the growing uncertainty over how Trump will govern.

The U.S. currency was little changed from its late Thursday levels against a basket of major currencies, but remains 3.5 percent higher since Trump's election victory in November. However, it has shed more than 1 percent in value so far in January as concerns grow over Trump's protectionist rhetoric and recent comments about his dissatisfaction with the strong dollar.

Dollar traders largely took bets off the table, analysts said, a reflection of Friday's dearth of U.S. data and investors' anxiety over what the new president will say in his inaugural address.

"Everybody's waiting for Trump," said Charles St-Arnaud, senior strategist and economist at Nomura Securities International in London.

"Even (Taiwan OTC: 6436.TWO - news) though traditionally the inauguration speech is not a speech where you lay down details on your policies, Trump is unconventional so he could change the convention on that one."

The dollar index was flat at 101.130 and was little changed for the week.

"What is clear is that the risks from Trump are not as one-sided as the market has been playing so far, particularly when you look at the protectionist plans," said Thu Lan Nguyen, a currency strategist with Commerzbank (Xetra: CBK100 - news) in Frankfurt.

"We are moderately bullish on the dollar, but we are not looking for as much appreciation as we have seen in the last few years ... maybe a 3 percent rise in the DXY this year."

The euro was flat against the dollar, hovering around $1.0665, just above 7-week lows hit on Tuesday. It was on pace to gain 0.2 percent for the week, its fifth consecutive weekly rise.

The dollar rose 0.1 percent against the yen in choppy trading, vacillating on either side of the 115 yen mark, which analysts said represented an important psychological barrier for the currency pair. It was last at 114.95 yen.

The British pound dipped 0.2 percent to $1.233. Sterling was on pace to rise more than 1 percent versus the dollar for the week, aided by its largest one-day percentage gain against the greenback since at least 1998 on Tuesday. (Reporting by Dion Rabouin; Additional reporting by Patrick Graham in London; Editing by Nick Zieminski)