* Fed's intended gradual pace of hikes disappoints dollar
* Sterling knocked off highs as May sets Brexit trigger date
* Euro off highs, with French election debate in focus
TOKYO, March 21 The dollar was on the defensive
in Asian trading on Tuesday, after Chicago Federal Reserve
President Charles Evans reinforced the perception that the U.S.
central bank won't accelerate the pace of its interest rate
The dollar index, which tracks the greenback against a
basket of six major rivals, edged down 0.1 percent to 100.35
after falling as low as 100.02 overnight, its lowest
since Feb. 7.
Evans, a voter on the Fed's policy-setting committee this
year, repeated the central bank's call for two more interest
rate increases this year, disappointing dollar bulls who had
hoped for more a faster pace of hikes.
Evans did say, however, that an additional hike was possible
if inflation were to pick up.
The Fed lifted interest rates last week and said that its
future course of hikes would be "gradual". That pushed down U.S.
Treasury yields, to the dollar's detriment.
The yield on benchmark 10-year notes stood at
2.464 percent in Asian trading, down from its U.S. close on
Monday of 2.472 percent.
The dollar slipped 0.1 percent to 112.48 yen after
dipping as low as 112.44, its deepest trough since Feb. 28, as
market participants in Tokyo returned from a public holiday on
"The dollar is feeling pressure from lower U.S. Treasury
yields," said Mitsuo Imaizumi, Tokyo-based chief
foreign-exchange strategist for Daiwa Securities.
"There will be a lot of stop-loss selling if the dollar
breaks under 112 yen," he added.
Kansas City Fed President Esther George, Cleveland Fed
President Loretta Mester and Boston Fed President Eric Rosengren
will all speak later on Tuesday. Fed Chair Janet Yellen is
scheduled to speak at a conference on Thursday.
The euro was steady on the day at $1.0741 but
remained shy of last week's $1.0782.
France's upcoming two-round election on April 23 and May 7
remained in focus, with nearly 40 percent of voters saying they
are undecided about which of five main contenders to back.
The leading candidates clashed in a televised debate on
Monday, with centrist Emmanuel Macron accusing far-right leader
Marine Le Pen of lying and seeking to divide the French.
Sterling edged up 0.1 percent to $1.2370, but
remained well shy of its Monday high of $1.2436, its loftiest
peak since Feb. 28, after Prime Minister Theresa May said she
will trigger Britain's separation proceedings with the European
Union on March 29, launching two years of Brexit negotiations.
"Despite the doom and gloom hanging over sterling, it has
held up well this year – if so traders are to be surprised with
some sort of plan or minor victory from the UK government, we
could in fact see GBP trading higher in a relief rally," wrote
Matt Simpson, senior market analyst at ThinkMarkets in
"Still, with two years on the clock there is still a lot
that can go wrong, so hold on to your hats as we could be in for
a rocky ride," he added.
(Reporting by Tokyo markets team; Editing by Eric Meijer)