* Dollar broadly higher after Harker, Mester comments
* French politics weighing on euro
* Strong PMI surveys from France, Germany
* Graphic: World FX rates in 2016 tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, Feb 21 The dollar rose broadly on
Tuesday after two Federal Reserve policymakers pointed to the
potential for U.S. interest rates to rise next month, returning
investors' attention to the bullish fundamentals of the world's
The greenback has struggled through the first two months of
2017, handing back all of the gains it made against the euro and
several other major currencies after Donald Trump's election as
U.S. president in November.
Signals that Trump's administration is unhappy with the
dollar's strength have been one big part of those falls, along
with worries that a sometimes chaotic first month in office does
not bode well for the delivery of tax reform and new spending.
But against that are the solid economic data and rises in
U.S. inflation that have led Fed policymakers including chair
Janet Yellen to promise a rise in rates shortly.
Cleveland Fed President Loretta Mester said late on Monday
she would be comfortable raising rates at this point if the
economy maintained its current performance.
Market News International also quoted colleague Patrick
Harker reiterating that a March rise was on the table.
"My sense, although we're not all in agreement (in this
trading room), is that the dollar is just on a firmer footing,"
said Neil Mellor, a strategist with Bank of New York Mellon in
"Fundamentals have started to take a greater slice of the
attention again, not least because of Janet Yellen's message
last week. Whether it will stay like that is the big question."
The euro hit a six-day low of $1.0562 in morning trade in
Europe, down around half a percent on the day.
The dollar was also up 0.6 percent against the New Zealand
dollar, 0.5 percent against its Australian counterpart
and 0.4 percent against the Swiss franc.
Much attention has focused in recent days on risks around
France's elections. One poll on Monday, while an outlier, showed
the gap between centrist favourite Emmanuel Macron and far-right
anti-EU nationalist Marine Le Pen shrinking to 16 points.
A strong batch of purchasing manager surveys out of France
and Germany were not enough to halt the falls in the euro.
"Everybody has learned lessons from last year's big
surprises," said Ayako Sera, market strategist at Sumitomo
Mitsui Trust Bank. "The euro could face further pressure given
there's still time before the election."
For Reuters Live Markets blog on European and UK stock
markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Editing by Catherine Evans)