June 9, 2017 / 3:40 PM / 6 months ago

FOREX-Dollar stronger as sterling falls on election shock

* Dollar index hits highest since May 30

* British PM May falls short of parliamentary majority

* C$ strengthens as strong jobs data builds case for rate hikes

* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh (Updates with U.S. market open; changes dateline; previous LONDON)

By Saqib Iqbal Ahmed

NEW YORK, June 9 (Reuters) - The dollar rose to a 10-day high against a basket of currencies on Friday, boosted by a weaker British pound after Prime Minister Theresa May’s Conservative Party lost its parliamentary majority in national elections.

The dollar index, which tracks the greenback against six major rivals, was up 0.46 percent at 97.364.

The index had fallen to a seven-month low midweek on caution ahead of U.S. Senate testimony by former FBI Director James Comey and the British election. But on Friday, it added to gains from the previous session.

Comey on Thursday accused President Donald Trump of firing him to try to undermine the bureau’s investigation of possible collusion between his 2016 presidential campaign team and Russia, but did not say whether he thought the president sought to obstruct justice.

The euro was down 0.24 percent to $1.1185 against the dollar, a day after the European Central Bank closed the door on more interest rate cuts.

“The overall sentiment is that regardless of what is going on elsewhere, the U.S. is a safe haven for investors and traders,” said Minh Trang, senior currency trader at Silicon Valley Bank in Santa Clara, California.

“That’s why you are seeing the (U.S.) stock market up and the dollar stronger,” he said.

Traders will turn their attention to next week’s U.S. Federal Reserve policy meeting, where the central bank is widely expected to deliver this year’s second rate hike.

“We had weak jobs data last week, but I think they are really on path to hike rates,” Trang said. “Everyone will be looking at the verbiage, in particular with the Fed’s balance sheet and some of the outlook.”

Britain’s pound tumbled after an election that denied any party a majority in Parliament and fomented a sense of political chaos just days before Brexit talks begin.

The result - flagged by some analysts as the worst possible election outcome due to uncertainty - caused the pound to fall as much as 2.5 percent to $1.2635 in early European trade, its lowest level since May called the election on April 18.

It recovered a little to trade down 1.68 percent to $1.2733.

The Canadian dollar strengthened against its U.S. counterpart, recovering from an earlier 1-week low as strong domestic jobs data supported the view that the Bank of Canada will raise interest rates earlier than previously thought.

Reporting by Saqib Iqbal Ahmed; Editing by Dan Grebler

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