* Yellen says appropriate for Fed to be cautious
* Euro hits 8-day high vs dollar
* Dollar index hits one-week low (Updates prices, adds comments)
By Sam Forgione
NEW YORK, March 29 (Reuters) - The U.S. dollar hit its lowest level against the euro in over a week and fell against other major currencies on Tuesday after Federal Reserve Chair Janet Yellen said it was appropriate for the Fed to proceed “cautiously” in hiking interest rates.
In her first remarks since a press conference after the Fed left rates steady at its most recent meeting earlier this month, Yellen said she still expected headwinds from weak growth abroad, low oil prices and uncertainty over China would abate and allow the recovery to continue.
The euro hit an eight-day high against the dollar of $1.1269, while the dollar slumped against the yen to a session low of 112.88 yen, easing further from a nearly two-week high of 113.80 yen hit early in the session.
Yellen’s comments, which came after recent hawkish remarks from Fed officials, hurt the dollar by pushing out expectations for the central bank’s next interest rate hike. U.S. Fed funds futures implied traders saw a 43 percent chance of the central bank hiking rates in July, down from 51 percent on Monday.
“It was definitely dovish,” said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago, in reference to Yellen’s speech at the Economic Club of New York. “This is another push in the direction of fewer interest rate increases.”
The dollar index, which measures the greenback against a basket of six major currencies hit a one-week low of 95.344, while the dollar hit a one-week low against the Swiss franc of 0.9690 franc.
On Wall Street, the benchmark S&P 500 stock index was last up 0.49 percent. (Reporting by Sam Forgione; Editing by Lisa Von Ahn and Andrew Hay)