* Graphic: World FX rates in 2020 tmsnrt.rs/2egbfVh * Graphic: Trade-weighted sterling since Brexit vote tmsnrt.rs/2hwV9Hv LONDON, Feb 5 (Reuters) - Sterling edged higher against the dollar and the euro on Friday after the Bank of England avoided sub-zero rates for now, putting the pound on track for its fourth week of gains versus the dollar. Focusing on the prospects for a post-lockdown rebound, the Bank of England gave British lenders at least six months of breathing space on Thursday before negative interest rates are a possibility. “The BoE’s strong hints that negative rates would not be used at this stage in the economic cycle triggered a substantial re-pricing in the UK money market curve and GBP,” said Petr Krpata, chief EMEA FX at ING in a note to clients. Sterling was 0.2% higher at $1.3703 versus the dollar, gaining more than a cent against the greenback since the BOE’s statement in the previous session. It also hit its highest against the euro since May 2020 at 87.38 in earlier trade, before flattening at 87.45 against the single currency. The pound strength this week was a response to an “excessive” rise in UK yields after the BoE meeting, said Adrian Schmidt, head of FX strategy at Continuum Economics. “GBP was in any case already generously priced relative to the previous yield levels. While we can see a case for gains against the EUR, the rise against most other currencies looks excessive”. Money markets pushed forward expectations for a rate cut by six months to February 2022, before paring them back to December 2021. Before the BOE statements, bets were for rates to be cut to sub-zero in August 2021. Figures from mortgage lender Halifax showed on Friday that British house prices fell last month for the first time since May, taking the annual rate of increase to its weakest since August. (Editing by Raissa Kasolowsky)