(Corrects dollar index's weekly gain to 19-months in first paragraph)
* Dollar index rises to two-week highs
* Fed's stimulus-withdrawal plan drives US yields up, and up
* Market eyes Nikkei, Chinese money markets amid data dearth
By Ian Chua
SYDNEY, June 24 (Reuters) - The dollar scaled a fresh two-week peak against a basket of major currencies in Asia on Monday, having posted its best weekly gain in 19-months as momentum builds after the Federal Reserve laid out a roadmap for scaling back stimulus.
The dollar index rose 0.2 percent to 82.580, adding to last week's 2.2 percent rally. Against the yen, the greenback put on 0.6 percent to 98.40, while the euro fell as much as 0.3 percent to $1.3086, a low not seen since June 6.
The common currency has given back about 50 percent of its mid-May to mid-June rally, bringing in focus support at $1.3034, a level representing the 61.8 percent retracement.
The move came as U.S. benchmark Treasury yields shot to their highest in over 22 months, a factor that could make the dollar more attractive against other currencies. The 10-year yield hit 2.542 percent on Friday, the highest intraday level since August 2011 and up an astonishing 41 basis points for the week.
"While the volatility is likely to stay elevated and the path may not be as smooth given uncertainty over the U.S. economy, we expect the USD rally to have a further leg and broaden as the second half of 2013 progresses," analysts at Barclays Capital wrote in a client note.
They said their upbeat outlook for the dollar will be helped by the cyclical outperformance of the U.S. economy relative to the rest of the world, further normalisation of risk premia and market expectations of tightening.
Emerging market assets and commodity currencies, which had benefited most from the Fed's largess, have been hardest hit in recent sessions.
That saw the Australian dollar plumb a 33-month low of $0.9163, the New Zealand dollar hit a one-year low of $0.7700 and the Canadian dollar reach a 19-month low of C$1.0499 per U.S. dollar.
All three currencies were hovering not far from their troughs early on Monday.
The Aussie is the biggest underperformer in the dollar bloc, given the added worry of slowing growth in China, Australia's single largest export market.
JPMorgan now has a year-end target of $0.9000 for AUD/USD, versus parity previously, reflecting disappointing Chinese data since late March and an outlook for higher U.S. Treasury yields.
For NZD/USD, JPMorgan revised down its year-end target to $0.7600, from $0.8300, while nudging up its forecast for USD/CAD to C$1.0000 from C$0.9900.
There is no major economic news out of Asia on Monday, leaving the focus on the volatile Nikkei and developments in China's money market.
A recent spike in interbank borrowing costs had raised fears that stress in China's banking system could weigh on already slowing growth. (Editing by Wayne Cole)