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Sterling dips as coronavirus fears rattle nerves, boost euro

* Graphic: World FX rates in 2020 http://tmsnrt.rs/2egbfVh

* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv

LONDON, Feb 28 (Reuters) - The pound dropped on Friday, particularly against the euro, as worries about the fast-spreading coronavirus sent investors out of currencies deemed riskier.

With the biggest moves in the safe-haven Japanese yen, Swiss franc and in euro/dollar, where a sudden drop in U.S. interest rate cut expectations have whacked the greenback, sterling has been somewhat of a sideshow in markets this week.

Still, the pound has lost 2.5% versus the dollar this month and almost 2% against the euro as investors fret about Britain's negotiations with the European Union over a trade deal and whether a UK budget next week will include much more spending, which many investors say is necessary to boost economic growth.

The broad slump in risk appetite caused by the coronavirus spread has not helped the pound, either.

"While country-by-country tallies of COVID-19 shows an un-alarming total of 15 in the UK, its near 5% current account deficit means a tightening of financial market conditions leaves currencies like the pound vulnerable to the downside," MUFG analysts said in a note.

Sterling traded at $1.2880 in early Friday trading, slightly lower on the day, while it lost 0.4% against the euro at 85.70 pence - its weakest since mid-January. (Reporting by Tommy Reggiori Wilkes; Editing by Hugh Lawson)