* Dollar buoyed by Fed comments, safe-haven bid
* Traders eye Powell speech for cues on rate hikes
* Yen weakens to a two-week low
* Euro trades below the 1.13 level
* Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh
By Tom Finn and Saikat Chatterjee
LONDON, Nov 28 (Reuters) - The dollar rose for a fourth straight day on Wednesday as rising trade tensions prompted investors to seek the safe haven of the greenback, although a speech by the Federal Reserve’s chairman may curb those gains.
Expectations the Fed will raise interest rate twice more are priced into markets, but recent criticism of the Fed by U.S. President Donald Trump has raised concern the central bank may be wary of further tightening.
“Powell’s speech will be the highlight for markets today, and if he chooses to strike a dovish stance, that may signal more headwinds for the dollar,” said Morten Helt, a currency strategist at Danske Bank, referring to Fed Chairman Jerome Powell.
Against a basket of other currencies, the dollar drifted higher to 97.39, its highest level in two weeks and not far from its 2018 high. It later fell back to trade flat on the day as the euro and the British pound made some headway.
The dollar had been under pressure in recent weeks on signs the Fed might slow the pace of rate increases amid slowing global growth, peak corporate earnings and the escalating trade tensions.
“How concerned the Fed sounds about the current economic slowdown will be seen as an indication as to how quickly a rate pause might come,” said Thu Lan Nguye, a currency strategist with Commerzbank in Frankfurt. “I would be prepared for increased volatility in USD exchange rates.”
Investors will also focus on whether Powell addresses growing hostility from Trump, who said in an interview on Tuesday he is “not even a little bit happy” with the Fed chairman and that the central bank’s policies were hurting the economy.
Dollar strength also reflected risks around the G20 summit in Buenos Aires from Nov. 30-Dec. 1. Trump and his Chinese counterpart, Xi Jinping, are scheduled to discuss contentious trade matters there.
Trump said this week that it was “highly unlikely” he would accept China’s request to hold off a planned increase in tariffs. That drove investors to safe-haven currencies such as the dollar.
The yen, another currency considered a safe place to park cash, on Wednesday hit a two-week low of 113.90, suggesting investors were far from panicked about the latest trade rhetoric.
The euro fell 0.2 percent to $1.1267 but later recovered to $1.1285, to remain unchanged on the day.
The euro has lost 1.5 percent of its value in recent sessions on signs the euro zone economy is weakening and on tension between the European Union and Italy over Rome’s budget.
Sterling rallied towards $1.28 and 88 pence versus the euro as traders positioned before a UK parliamentary vote next month on Britain’s withdrawal agreement from the EU.
Prime Minister Theresa May is expected to lose the vote, but there is some hope the opposition Labour party could push for a second referendum if she fails to get her deal through parliament. (Additional reporting by Tommy Wilkes Editing by Larry King)