By Karen Brettell and Saqib Iqbal Ahmed
NEW YORK (Reuters) - The dollar rose to a seven week high against a basket of currencies on Thursday, after hawkish comments by a Federal Reserve official late on Wednesday encouraged investors to expect a near-term interest rate hike.
Fed Governor Lael Brainard said an improving global economy and a solid U.S. recovery mean it will be "appropriate soon" for the Fed to raise rates.
The remarks come after New York Fed President William Dudley and San Francisco Fed President John Williams rattled investors on Tuesday with more aggressive than expected language about hiking rates.
"We have had this slew of Fed speakers, all of whom seem to be very much favoring a rate hike very soon. It's entirely Fed-focused at the moment," said Craig Erlam, senior market analyst at Oanda in London.
Recent labor market and inflation data have also bolstered the case for a rate hike soon.
"We've had this great run of data in the U.S. and the expectation on a March rate move has gone up,” said Steven Englander, global head of foreign exchange strategy at Citigroup in New York.
Futures traders are now pricing in an 80 percent chance of a Fed hike in March, up from 66 percent on Wednesday and from 35 percent on Tuesday, according to the CME Group's FedWatch Tool.
Fed Chair Janet Yellen and Vice Chair Stanley Fischer are both due to speak on Friday.
The dollar rose 0.45 percent against a basket of six major currencies <.DXY> to 102.24, its highest since Jan. 11
The greenback was last up 0.75 percent against the Japanese yen <JPY=> at 114.56, the highest since Feb. 15. The euro fell 0.47 percent against the dollar <EUR=> to $1.0496.
The dollar has strengthened even as many analysts see limited further gains for the currency due to worries about the impact of higher rates and a stronger dollar on global growth.
High-yielding emerging market currencies including the South Korean won <KRW=>, South African rand <ZAR=> and Brazilian real <BRL=> have also performed strongly this year despite the rise in Treasury yields.
Ten-year U.S. Treasury yields <US10YT=RR> have failed to hold over 2.50 percent for any prolonged period despite prices weakening dramatically since Donald Trump won the U.S. election in November.
A sustained move higher, however, could weigh on emerging market currencies, Citi's Englander said.
(Editing by Meredith Mazzilli)