By Shinichi Saoshiro
TOKYO (Reuters) - The dollar steadied against a basket of currencies on Monday after slipping on soft U.S. economic data, with investors awaiting comments by a top Federal Reserve official for clues on whether recent strength can be sustained.
The dollar index against a group of major currencies was flat at 97.187 <.DXY>.
The index had climbed to a two-week high of 97.560 late the previous week after the Fed raised interest rates and kept the door open for another hike in 2017. But its rally was tempered by Friday's weaker-than-expected housing and consumer sentiment data.
The market is looking to comments by New York Fed President William Dudley for potential support for the greenback. Dudley, a close ally of Fed Chair Janet Yellen, is due to take part in a roundtable with local business leaders in Plattsburgh, New York.
"In the wake of Friday's weak U.S. data, Dudley could provide insight into whether the Fed is still poised to continue normalising monetary policy," said Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo.
"My view is that Dudley won't sound too dovish, and thus allow the dollar's gradual rise to resume."
Dudley could help clarify why the Fed appeared to ignore a series of soft inflation readings as it marched on with tighter policy last week.
The dollar was up 0.15 percent at 111.020 yen <JPY=>. It had set a two-week peak of 111.420 on Friday before the U.S. data-induced retreat.
The euro treaded water at $1.1198 <EUR=> after gaining about 0.5 percent on Friday.
The common currency showed little reaction to French President Emmanuel Macron winning a commanding majority in his country's parliamentary election on Sunday. Analysts said polls had favoured Macron and that his victory had been mostly factored in. [nL8N1JF02M]
The pound was little changed at $1.2770 <GBP=D3>. It hardly budged on news that several people were injured in north London early on Monday after a van rammed into worshippers leaving a mosque. [nL8N1JG01F]
The currency has been through a turbulent month, sinking to a near two-month low of $1.2636 on June 9 on the British elections shock, but rallying last week as the Bank of England came close to hiking rates after a split vote in its monetary policy committee.
Sterling has been confined to a narrow range over the past few days but faced potential volatility ahead as Britain begins its negotiations to exit the European Union on Monday.
"While medium-term GBP appreciation is still likely, the tail risks of a no-deal or disorderly Brexit scenarios have increased, and should weigh on GBP," wrote currency strategists at Barclays.
The Australian dollar was a shade higher at $0.7625 <AUD=D4>, inching towards a 2-1/2-month high of $0.7636 scaled on Wednesday thanks to upbeat local employment data.
(Editing by Richard Pullin & Shri Navaratnam)