Sterling steady vs dlr; near 2-wk trade-weighted high

* Sterling steady at $1.5401 <GBP=>

* Pound hovers near two-week high on trade-weighted basis

* CBI Nov Distributive Trades survey eyed

LONDON, Nov 28 (Reuters) - Sterling held steady against the dollar and euro on Friday, tracking gains in UK share prices that reflected an easing of extreme risk aversion.

The FTSE 100 index of leading British shares .FTSE rose 0.3 percent to modestly extend Thursday's advance.

However sterling is still down more than 22 percent on the year against the greenback, highlighting a bleak outlook for the British economy as policymakers and the government scramble to stave off a deep recession.

"The past year has really demonstrated the vulnerability of the UK economy to the credit crisis," said Philip Shaw, chief economist at Investec.

"I suspect that the geared nature of the UK household sector and the various imbalances affecting the economy will prevent a rally in sterling over the medium to long term," he added.

By 0827 GMT, sterling was broadly steady at $1.5401 <GBP=>, while the euro was also flat at 83.63 pence <EURGBP=>  Continued...