* Dollar rally loses steam as investors eye Yellen's speech
* Yellen could counter hawkish tone in Fed minutes
* ECB Draghi also due to speak at Jackson Hole
By Ian Chua
SYDNEY, Aug 22 The dollar hovered just below its
2014 peak against a basket of major currencies early on Friday,
with bulls turning cautious ahead of a speech by Federal Reserve
Chair Janet Yellen.
The dollar index, which ended the New York session
lower for the first time this week, traded at 82.154, off a high
of 82.364 - a level last seen in early September.
It was still up 0.9 percent so far this week and on track to
post its best weekly gain since late January. Upbeat housing
data and a hawkish-sounding Fed minutes have combined to give
the greenback a big boost.
This week's rally left the dollar on the verge of breaking
above its April peak of 104.13 yen, a move that could
open up the way to 105.45 set in January. It was last at 103.85
yen, not far from the overnight peak of 103.97.
The euro fetched $1.3282, having bounced off an
11-month trough of $1.3242, aided in part by a survey that
showed Germany's private sector grew for a 16th month running
Other currencies were also off their lows including the
Australian dollar, which popped back above 93 U.S. cents
from a 2-1/2 month low of $0.9235.
Traders said the risk to dollar bulls now is Yellen herself.
"After the hawkish bias to FOMC minutes, the dovish camp
gets its chance to sound off at Jackson Hole," said Kit Juckes,
strategist at Societe Generale.
Yellen is due to give a speech at the annual gathering of
central bankers in Jackson Hole, Wyoming. The topic of this
year's symposium is "Re-Evaluating Labor Market Dynamics".
Last month, Yellen stressed there was significant
underutilization of labour resources, prompting markets to push
back the timing of the first interest rate hike.
Highlighting the lively debate between Fed members on when
to tighten, Kansas City Fed President Esther George told CNBC on
Thursday the time has come for higher rates.
Her more middle-of-the-line colleague, San Francisco Fed
President John Williams said the bank should wait until the
summer of next year.
Sterling was a notable underperformer on Thursday, held back
by disappointing domestic data that suggested Britain's
consumer-led recovery might be starting to slow.
Retail sales grew in July at the slowest annual rate since
Sterling plumbed a four-month trough of $1.6564 and
was last struggling at $1.6578.
Asia is looking at the prospect of an uneventful session
given an absence of any major economic data. That should leave
the focus squarely on Jackson Hole, where European Central Bank
President Mario Draghi will also be giving a speech.
(Editing by Shri Navaratnam)