* Dollar/yen hits highest in more than 3 weeks
* Fed’s Dudley says wages, inflation should pick up
* Dollar index touches highest since May 30
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Jemima Kelly
PARIS, June 20 (Reuters) - The dollar hit a three-week high against a basket of currencies on Tuesday, after an influential Federal Reserve official said U.S. inflation would pick up as wages improved, bolstering bets on the Fed continuing to raise interest rates.
The greenback got a further lift on Tuesday when Bank of England Governor Mark Carney said now was not the time to raise British interest rates, sending sterling down more than half a percent against the U.S. currency.
The dollar index - which measures the greenback against six other major currencies, including sterling - edged up to 97.623 , its highest since the end of May.
New York Fed President William Dudley said on Monday that tightening in the labour market should help drive up inflation, reinforcing the message that a recent patch of weak data is unlikely to derail plans to keep raising interest rates.
Separately, Chicago Fed President Charles Evans said on Monday it may be worthwhile for the U.S. central bank to wait until year-end to decide whether to raise interest rates again.
“Bill Dudley commonly represents the majority view on the FOMC (Federal Open Market Committee) - this is the main reason why the dollar is appreciating,” said Commerzbank strategist Thu Lan Nguyen, in Frankfurt. “Evans was more dovish but he’s known to be dovish.”
“These comments from Bill Dudley have brought the market a little bit close to the Fed’s view, but just a little bit,” added Nguyen, calling the market’s general view on the Fed’s rate path “pessimistic” compared with the central bank’s own projections.
Investors are now pricing in around a 50-percent chance that rates will be raised again by the end of the year, according to CME FedWatch.
Against the yen, the dollar rose to as high as 111.90 , its strongest level since May 26. That marked a gain of almost 3 percent from the dollar’s near 2-month low of 108.81 yen set on June 14.
The greenback last stood at 111.67 yen, up 0.1 percent on the day.
The greenback has edged higher since the Fed on June 14 raised interest rates for a second time in 2017 and announced it would begin cutting its holdings of bonds and other securities later this year, while indicating that a recent softening in inflation was seen as transitory.
The dollar may see further gains against the yen, especially after Bank of Japan Governor Haruhiko Kuroda last week indicated the BOJ would be in no hurry to dial back its massive stimulus programme, said Tan Teck Leng, forex analyst for UBS Wealth Management in Singapore.
“Short-term, maybe the dollar/yen could be the one that’s more interesting,” Tan said. However, any weakness in U.S. inflation data going forward would pose a risk for dollar bulls, he added.
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Additional reporting by Masayuki Kitano in Singapore; Editing by Andrew Heavens