* Fed's Yellen seen as more balanced in her Jackson Hole
* Dollar rises to 4-1/2-month high vs yen; euro hits
* ECB's Draghi also due to speak at Jackson Hole gathering
(Recasts, adds Yellen speech, analyst comments, changes byline,
dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, Aug 22 The dollar gained on Friday
after Federal Reserve Chair Janet Yellen came out more balanced
than expected on her views about the U.S. economy in a speech to
The speech by Yellen, a known policy 'dove', to an annual
gathering of central bankers in Jackson Hole, Wyoming, cited
persistent labor market slack but noted faster recovery in the
sector could accelerate the timing of a Fed interest rate hike.
The greenback climbed to an 11-month high against the euro
and a more than four-month peak above 104 yen versus the
Japanese currency following Yellen's speech.
Yellen acknowledged the slack in the U.S. jobs market as she
called for a "pragmatic" approach to monetary policy that allows
officials room to evaluate data without committing to a
pre-determined rate path.
At the same time, she said the labor market may in fact be
tighter than it seems and the Fed may have to raise rates sooner
and faster than expected.
Higher interest rates tend to boost the allure of the dollar
as they raise the yield on some U.S. assets.
"On balance, the speech was a very gradual and nuanced move
away from Yellen's overtly dovish policy stance in the past
toward a more balanced view on the economy and on monetary
policy," said Omer Esiner, chief market analyst at Commonwealth
Foreign Exchange in Washington.
The dollar rose as high as 104.18 yen, its highest
since early April, and was last up 0.2 percent at 104.10 yen.
The euro, meanwhile, plunged to $1.3229 against the
dollar, its lowest since September 2013. It last traded at
$1.3230, down 0.4 percent.
For Joe Manimbo, senior market analyst at Western Union
Business Solutions, Yellen seemed less concerned about low wage
"Low wages are seen as an obstacle to an early Fed rate hike
so any less concern on that front would be supportive of the
rate debate," Manimbo said. "The fact that the event risk of the
Fed chair's speech has come and gone has also allowed the dollar
to resume its upturn."
With Yellen's speech out of the way, investors are focused
on what European Central Bank President Mario Draghi will say at
Jackson Hole later in the session. His speech will be
scrutinized for any clues that euro zone policymakers are moving
closer toward outright asset purchases, a scenario that would
likely keep the euro under pressure.
(Additional reporting by Anirban Nag in London; Editing by