UPDATE 1-Sterling steadies above $1.41 as risk currencies gain

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

* Graphic: Trade-weighted sterling since Brexit vote http://tmsnrt.rs/2hwV9Hv (Updates prices, adds background)

By Ritvik Carvalho

LONDON, Feb 25 (Reuters) - A rally in risk currencies on Thursday helped sterling steady near $1.41, a day after it hit its highest levels in nearly three years.

The pound surged to $1.4295 on Wednesday, as analysts maintained a positive outlook on the currency.

Bets that Britain's vaccine rollout will enable a quicker reopening of its economy and relief over a Brexit trade deal have pushed sterling up 3.5% against the dollar since January, making it the best-performing G10 currency this year.

Also supporting the pound has been a pushing back of expectations for negative interest rates from the Bank of England. Money markets do not reflect negative rate expectations at least as far out as August 2022.

U.S. Federal Reserve Chair Jerome Powell on Wednesday calmed fears that higher inflation would also lead to a tapering of monetary stimulus, saying the central bank would not change policy until the economy was clearly improving.

On Thursday, a broad risk-on tone in markets after Powell's assurances spurred a rally in commodity-linked currencies such as the Canadian, Australian and New Zealand dollars and the Norwegian crown, pushing the dollar and other safe havens lower.

"Classical FX havens are weakening (CHF, JPY) and risk currencies such as GBP and NOK are performing well as U.S. rates are now rising in tandem with equities and commodities," said Lars Sparresø Merklin, senior analyst at Danske Bank.

The pound is correlated with risk and growth and tends to gain along with risk-on plays in markets. It traded 0.1% higher at $1.4147 by 1553 GMT. It was 0.4% lower against a broadly stronger euro at 86.40 pence.

Issues over Brexit still simmer, although analysts maintain they won't hurt the pound in the short to medium-term.

Northern Ireland's first minister upped the ante on Wednesday in a dispute between the UK and the European Union over trade with the province, calling on Prime Minister Boris Johnson to "step up and protect the United Kingdom".

Earlier, Britain and the EU held talks and agreed to press on with work to resolve the difficulties that have impeded deliveries of goods, notably food, from other parts of the United Kingdom to Northern Ireland and caused some shortages in supermarkets.

The dispute has cast a shadow over a post-Brexit trade deal agreed late last year and threatens to further sour future ties between the neighbours. (Reporting by Ritvik Carvalho. Editing by Larry King and Mark Potter)