* Higher U.S. Treasury yields bolster greenback
* Fed's Yellen, Fischer slated to speak later Friday
* Aussie licks wounds, on track for weekly drop
TOKYO, March 3 The dollar slipped on Friday but
remained on track for a solid weekly gain on growing
expectations the U.S. Federal Reserve will raise interest rates
at its mid-March meeting, which led to a rise in U.S. Treasury
The dollar index, which gauges the greenback against a
basket of six major currencies, was down 0.2 percent at 102.020
but not far from the previous session's high of 102.260,
its loftiest peak since Jan. 11. For the week, it was up 0.9
Against the yen, the dollar fell 0.3 percent on the day to
114.11 after scaling a peak of 114.595 in the previous
session, its highest since Feb. 15. The dollar was up nearly 2
percent for the week.
"There were some investors who weren't positioned for the
possibility of a rate increase this month, and the dollar is
benefiting as they adjust their expectations," said Mitsuo
Imaizumi, the Tokyo-based chief foreign-exchange strategist for
Comments this week from New York Fed President William
Dudley as well as San Francisco Fed President John Williams
buoyed dollar bulls, and prompted more investors to increase
their bets on a rate increase as early as this month.
Fed funds futures on Thursday implied traders saw a 79.7
percent probability of a Fed rate hike at its March 14-15 policy
meeting, up from 66.4 percent on Wednesday, according to data
from CME Group's FedWatch program.
That helped push up yields on U.S. two-year notes,
which are considered most vulnerable to Fed rate hikes, to their
highest since August 2009.
Fed Chair Janet Yellen as well as Vice Chair Stanley Fischer
are slated to speak later on Friday, and could reinforce the
"We also changed our own expectations for a rate increase to
March, from June," said Harumi Taguchi, principal economist at
IHS Markit in Tokyo.
"But still, we don't know how U.S policy will continue, and
there are also political risks, which could possibly change the
trend back to a stronger yen," she said.
The euro edged up 0.1 percent to $1.0520, after
dipping as low as $1.0495 overnight, within a tick of its lowest
level since Jan. 11. It was down 0.4 percent for the week.
The Australian dollar licked its wounds, down 0.2 percent on
the day at $0.7559. It skidded as low as $0.7543, the
weakest since Jan. 31, as it came under pressure from slumping
oil prices and the broadly stronger U.S. currency.
The Aussie was down 1.4 percent for the week, set for its
worst weekly performance since mid-December.
Sterling was steady on the day at $1.2267 after
plumbing a low of $1.2243 on Thursday, its nadir since Jan. 17.
(Reporting by Tokyo markets team; Editing by Shri Navaratnam
and Richard Borsuk)