* Graphic: sterling and gilt yields bit.ly/2dgAXn1
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
* Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv
LONDON, Nov 27 (Reuters) - Sterling steadied on Monday after posting its biggest weekly rise in more than a month as investors worried about Brexit negotiations next month in the light of a political crisis in Ireland.
A deal on the Northern Ireland border — a key demand by EU policymakers — has suddenly become trickier as the Dublin government looked set to fall.
“Sterling has become more jittery as the focus has changed somewhat from the EU summit which is more or less a binary event to the Northern Ireland issues which is a bit more complicated,” said Rabobank currency strategist Jane Foley, in London.
The European Union handed Prime Minister Theresa May a 10-day “absolute deadline” to improve her Brexit divorce offer, including a resolution on the Northern Ireland border issue, or face failure in persuading EU leaders to open trade talks with Britain at a December summit.
While sterling currency markets, including derivatives, have been largely quiet in the run up to the crunch summit in mid-December, investors worry the British pound will become more vulnerable to political headlines as the date nears.
Irish Prime Minister Leo Varadkar, who has warned of a veto without big British moves on the border issue, may call a snap election next week over a separate issue.
In a week shortened by holidays in the United States and Japan, the British pound rose more than a percent last week, its biggest weekly rise since Oct. 15.
Sterling hit a near two-month high of $1.3360 on Friday and is on track to post its first monthly rise in three months.
On Monday, it was flat against the dollar at $1.3344.
Sterling was flat against the Japanese yen at 148.57 yen .
The dollar lacked momentum on Monday as persistently low inflation is seen as undermining the case for the Federal Reserve’s rate hikes. (Reporting by Saikat Chatterjee; Editing by Toby Chopra)