* Fed's Yellen nods to March hike if data holds up
* Poll gain for Macron adds to support for euro
(Adds details from Yellen speech, quotes, updates prices)
By Saqib Iqbal Ahmed
NEW YORK, March 3 The dollar slipped against a
basket of major currencies on Friday after Federal Reserve Chair
Janet Yellen said that raising interest rates this month would
be appropriate as long as the economy continues to improve as
Yellen's remarks follow hawkish comments in recent days from
a slew of Fed speakers and cement a likely rate hike at the
Fed's next meeting on March 15.
Analysts said the rate increase had largely been priced in
before Yellen's comments, sending the dollar lower on Friday
afternoon as some investors took profits.
"There's a lot of positive news now priced into the market,
and I think we'll probably see some profit-taking, so I think
we'll probably see the dollar weaken from here," said Douglas
Borthwick, managing director at Chapdelaine Foreign Exchange in
Yellen also said rates are likely to rise faster this year
as the economy for the first time in her tenure appears clear of
any imminent hurdles at home or abroad.
"Yellen's comments have caught up with market expectations,
in that she's looking for three rate moves this year," Borthwick
The dollar index, which measures the greenback
against a basket of six major currencies, was down 0.7 percent.
It is up about 0.4 percent this week and on Thursday, hit a
seven-week high of 102.26.
Futures traders now are pricing in an 86 percent chance of a
Fed hike in March, up from 35 percent on Tuesday, according to
the CME Group's FedWatch Tool.
Against the Japanese yen the greenback was down 0.24
The euro rebounded from recent weakness to rise 0.93 percent
against the dollar after a poll showed French far-right
candidate Marine Le Pen's chances in the country's presidential
The political race, however, has not been the main driver
for the euro's recent weakness, said Shaun Osborne, chief FX
strategist at Scotiabank in Toronto.
"That's more about the shift in relative yields and monetary
stance given the move in short-term rates in the U.S.," he said.
U.S. two-year Treasury yields hit their highest in more than
7-1/2 years on Thursday.
Rate hike expectations also weighed on the New Zealand
dollar, which was on pace for its worst week in eleven
against the greenback. On Friday, the kiwi dollar was down 0.41
Mexico's peso rallied to a nearly four-month high
after the new U.S. Secretary of Commerce Wilbur Ross offered
support to the battered currency and said Mexico and the United
States could reach a mutually beneficial trade deal.
(Additional reporting by Sam Forgione; Editing by Bernadette