* Dollar pulls away from 8-week lows vs euro, yen
* Boosted by Fischer’s hawkish comments
* Investors await Yellen’s speech at Jackson Hole (Updates prices, adds quote)
By Anirban Nag
LONDON, Aug 22 (Reuters) - The dollar rose on Monday, tracking short-dated U.S. Treasury yields after comments from Federal Reserve Vice Chairman Stanley Fischer revived bets on a U.S. interest rate hike by the end of this year.
The two-year Treasury yield rose to a post-Brexit high of 0.7830 percent after Fischer said he thought the central bank was close to achieving its employment and inflation targets.
Along with comments from Fed officials William Dudley and John Williams, who last week mooted the possibility of a September hike, Fischer’s views are likely to underpin the dollar heading into the Jackson Hole symposium later this week.
Federal funds futures suggest traders saw a 53.5 percent chance of a rate hike this year, up from 48.8 percent on Thursday, CME Group’s FedWatch programme showed. Expectations for a hike in September were at around 20 percent.
The dollar was up 0.4 percent at 100.60 yen, staying away from an eight-week low of 99.550 struck early last week. The euro was down 0.2 percent at $1.1295, pulling away from $1.1366, its highest since June 24 reached on Thursday. The dollar index rose 0.3 percent to 94.756.
“Fischer and Dudley are important in the Fed leadership and clearly Fischer’s comments are supporting the dollar,” said Yujiro Goto, currency strategist at Nomura.
“But we have to wait for (Fed Chair) Janet Yellen’s comments (at Jackson Hole) and if they are dovish then we could see the dollar come back under pressure.”
The currency market has fluctuated over the past week on mixed signals regarding U.S. monetary policy. The dollar index hit a seven-week low last Thursday after minutes from the Fed’s July meeting showed a bias among policymakers against raising interest rates soon.
Bank of Tokyo Mitsubishi analyst, Lee Hardman, said he expected the Fed chair to remain cautious and refrain from signalling when the central bank will raise rates.
“There is still around a month until the next meeting on the Sept. 21 and the Fed will likely feel it is too early to commit to a rate hike at this stage. Rather the Fed is more likely to emphasise the outlook remains data dependent,” he said.
The yen sagged after the Sankei newspaper reported over the weekend that the Bank of Japan would not rule out deepening a cut to negative rates, quoting Governor Haruhiko Kuroda.
Reporting by Anirban Nag; Editing by Ruth Pitchford