* Dollar index up 0.15 pct, pares overnight losses
* Greenback steadies after Fed minutes disappoint dollar bulls
* Minutes not as hawkish as some hoped
* But prospect of a March rate hike remains
By Shinichi Saoshiro
TOKYO, Feb 23 (Reuters) - The dollar moved away from overnight lows and steadied on Thursday as the market reassessed the minutes of the Federal Reserve’s last policy meeting, which kept the prospect of a March rate hike in play.
The minutes of the Fed’s Jan.31-Feb.1 gathering noted many policymakers saying it may be appropriate to raise interest rates again “fairly soon” should jobs and inflation data come in line with expectations.
This initially disappointed dollar bulls, who had hoped for a more hawkish tone after Fed Chair Janet Yellen said last week that waiting too long to raise rates again would be “unwise.” The greenback also sagged as policymakers mentioned the downside economic consequences of a stronger dollar.
The U.S. currency fell to a low of 112.905 yen overnight in a knee-jerk reaction to the Fed meeting minutes but had pulled back to 113.420 early on Thursday for a gain of 0.1 percent.
“Of chief interest to the market right now is whether the Fed can still raise rates in March, and the meeting minutes did not suggest that a hike next month is no longer a possibility,” said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo, on the dollar’s modest bounce.
The euro was 0.1 percent lower at $1.0548, having pulled back from a 1-1/2-month low of $1.0494 plumbed the previous day.
The common currency bounced back overnight as the perceived chances of a French presidential election win by anti-European Union candidate Marine Le Pen took a slight dip. The possibility of Le Pen winning and potentially negative consequences for the euro zone have recently dogged the euro.
Veteran French centrist Francois Bayrou said on Wednesday he was offering an alliance with independent candidate Emmanuel Macron, a move that could give the former investment banker a much-needed boost to reach the runoff in May’s presidential election.
The dollar index against a basket of six major currencies recovered overnight losses and was up 0.15 percent at 101.380. It had moved between a one-week high of 101.720 and a low of 101.170 on Wednesday.
Sterling was little changed at $1.2450 after falling on Wednesday as data showed UK business investment fell in the fourth quarter of 2016, indicating tougher economic times lie ahead. (Reporting by Shinichi Saoshiro; Editing by Eric Meijer)