* Fed's intended gradual pace of hikes disappoints dollar
* Sterling knocked off highs as May sets Brexit trigger date
* Euro edges up as Macron solidifies lead in French election
TOKYO, March 21 The dollar was on the defensive
in Asian trading on Tuesday, after Chicago Federal Reserve
President Charles Evans reinforced the perception that the U.S.
central bank won't accelerate the pace of its interest rate
The dollar index, which tracks the greenback against a
basket of six major rivals, edged down 0.1 percent to 100.30
after falling as low as 100.02 overnight, its lowest
since Feb. 7.
The euro gained 0.1 percent on the day to $1.0754,
though it remained shy of last week's high of $1.0782.
France's coming two-round election on April 23 and May 7
remained in focus, with nearly 40 percent of voters saying they
are undecided about which of five main contenders to back.
The leading candidates clashed in a televised debate on
Monday, with centrist Emmanuel Macron accusing far-right leader
Marine Le Pen of lying and seeking to divide the French. Macron
apparently solidified his status as frontrunner.
"There was a bit of relief rally, or a squeeze in the euro
higher, on the back of news that Macron is ahead, but it's
pretty much in the price and we have some ways to go before the
election," said Sue Trinh, head of Asia FX strategy at Royal
Bank of Canada in Hong Kong.
"U.S. dollar weakness is the main theme," she said.
Sterling edged down slightly to $1.2356, but remained
well shy of its Monday high of $1.2436, its loftiest peak since
Feb. 28. The pound was toppled by Prime Minister Theresa May's
statement that she will trigger Britain's separation proceedings
with the European Union on March 29, launching two years of
On Monday, the Fed's Evans, a voter on its policy-setting
committee this year, repeated the central bank's call for two
more interest rate increases this year, disappointing dollar
bulls who had hoped for more a faster pace of hikes.
Evans did say, however, that an additional hike was possible
if inflation were to pick up.
The Fed lifted interest rates last week and said that its
future course of hikes would be "gradual". That pushed down U.S.
Treasury yields, to the dollar's detriment.
The yield on benchmark 10-year notes stood at
2.480 percent in Asian trading, compared with its U.S. close on
Monday of 2.472 percent.
The dollar added 0.2 percent to 112.79 yen as
bargain-hunting emerged after it dipped as low as 112.26
earlier, its deepest trough since Feb. 28, as market
participants in Tokyo returned from a public holiday on Monday.
Mitsuo Imaizumi, Tokyo-based chief foreign-exchange
strategist for Daiwa Securities, said the dollar felt pressure
from lower U.S. Treasury yields earlier in the session.
"There will be a lot of stop-loss selling if the dollar
breaks under 112 yen," he added.
Kansas City Fed President Esther George, Cleveland Fed
President Loretta Mester and Boston Fed President Eric Rosengren
will all speak later on Tuesday. Fed Chair Janet Yellen is
scheduled to speak at a conference on Thursday.
(Reporting by Tokyo markets team; Editing by Eric Meijer and