* Dollar index touches 2014 high
* European shares wobble as Russia convey enters Ukraine
* Treasuries yields rise
(Adds dollar gains, Wall Street open; changes dateline;
By Michael Connor
NEW YORK, Aug 22 The high-flying dollar moved
higher again on Friday after Federal Reserve Chair Janet Yellen
said the worrisome U.S. labor markets requires policymakers to
move cautiously when eyeing interest rate hikes.
The U.S. dollar index, which values the greenback
against a basket of a half dozen major currencies, was up 0.31
percent after reaching a new 2014 high of 82.413. The euro
was off 0.35 percent against the dollar at $1.323.
Tensions over Ukraine increased and blunted a European
stocks run-up, and U.S. Treasury yields edged up as Yellen spoke
at a central bankers meeting in Wyoming.
U.S. stocks were mixed in morning trading.
The labor market is still bruised from the Great Recession
and the Fed should move cautiously in determining when interest
rates should rise, Yellen said. The jobless rate has fallen more
quickly than expected, but Yellen said the economic disruption
of the last five years has left millions of U.S. workers
sidelined, discouraged or stuck in part-time jobs - facts not
captured in the unemployment rate alone.
In such an environment "there is no simple recipe for
appropriate policy," Yellen said, arguing for a "pragmatic"
approach that allows officials room to evaluate data as it
arrives without committing to a preset policy 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.
On Wall Street, which was flat ahead of Yellen's speech,
the Dow Jones industrial average fell 14.39 points, or
0.08 percent, at 17,025.10. The Standard & Poor's 500 Index
was down 2.34 points, or 0.12 percent, at 1,990.03. The
Nasdaq Composite Index was up 5.56 points, or 0.12
percent, at 4,537.66.
European shares were heading for their biggest
weekly gain since February but dipped 0.33 percent after a
Russian convoy of aid trucks entered eastern Ukraine without
Fears the conflict would worsen before next week's meeting
between Vladimir Putin and Ukraine President Petro Poroshenko
boosted safe-haven assets, but not enough to distract markets
from the main focus of when cheap and easy credit is likely to
come to an end.
News the Red Cross was also not moving into Ukraine with the
Russian trucks as planned triggered stock
selling in London, Frankfurt and Paris.
Shares in Moscow tumbled about 1.5 percent to bring
this week's rally to an abrupt halt, and the rouble also
Asian share markets had hitched a ride overnight on another
record close for Wall Street to end at a six-and-half-year high.
Yields on U.S. Treasuries rose, with the bellwether 10-year
note rate at 2.419 percent from 2.409 at Thursday's close.
In contrast, worries about the euro zone slipping toward
deflation and near-zero growth pinned German 10-year government
bond yields firmly below 1 percent on Friday.
In commodities trading, spot gold rose 0.16 percent
to $1,276 an ounce, after losing 1.3 percent on Thursday as rate
rise expectations sent it plowing through key support levels to
a two-month low.
Copper, finely tuned to China's fortunes, was near a
Oil eased as the strong dollar and plentiful supplies
continued to pressure prices. October Brent crude was
down 32 cents to $102.31 a barrel. U.S. crude was down 83
cents at $93.13 a barrel
(Reporting by Michael Connor in New York; Editing by Dan