* Dollar near a 7-week high on rate hike hopes
* Dollar hits 2-week high vs yen
* Fed’s Brainard: “appropriate soon” to raise rates
By Yuzuha Oka
TOKYO, March 2 (Reuters) - The dollar stood tall near a seven-week high on Thursday on growing signs the Federal Reserve is seriously considering raising interest rates this month, boosting the U.S. currency’s yield allure.
Federal Reserve Governor Lael Brainard said late on Wednesday an improving global economy and a solid U.S. recovery mean it will be “appropriate soon” for the Fed to raise rates.
The dollar index, which measures the greenback against a basket of six major currencies, was fetching 101.87. The index climbed to 101.97 on Wednesday, its highest since Jan. 11.
On Tuesday, two influential Fed policy makers, William Dudley and John Williams, jolted markets into higher expectations for a March U.S. interest rate increase, with comments that suggested rate-setters are worried about waiting too long in the face of pending economic stimulus from Washington.
“The Fed is likely to raise interest rates this month unless the U.S. jobs data due next week is bad,” said Yukio Ishizuki, FX strategist at Daiwa Securities in Tokyo.
Futures traders are now pricing in a 66 percent chance of a Fed hike in March, up from 35 percent on Wednesday, according to the CME Group’s FedWatch Tool.
U.S. President Donald Trump’s long-awaited speech on Tuesday failed to give specific details on his economic plans, but outlined broad tax cuts and a $1 trillion public-private initiative to rebuild degraded roads and bridges.
“Investors liked that Trump was behaving well during his speech although it lacked specifics in policies,” said Daiwa’s Ishizuki.
Against Japan’s currency, the dollar was up 0.3 percent, hitting a fresh a two-week high of 114.16 yen. It last stood at 114.05 yen.
Investors are closely watching speeches from Fed Chair Janet Yellen and Vice Chair Stanley Fischer on Friday for further policy clues.
Data on Wednesday showed that U.S. consumer price inflation jumped in January by 0.4 percent, the largest increase since February 2013, while consumer spending rose less than expected in the month, increasing 0.2 percent.
Sterling and the Canadian dollar weakened against the greenback to their lowest levels since Jan. 20.
Canada’s central bank struck a cautious tone while holding rates steady, weighing on the loonie.
Sterling sank to a six-week low of $1.2881 on Wednesday as disappointing economic data added to political nerves that have begun to weigh on the currency again after last year’s Brexit vote.
The euro was down 0.1 percent at $1.0534. The common currency dipped to a one-week low of $1.0514 against the dollar on Wednesday. (Editing by Shri Navaratnam)