Dollar inches lower as investors await Yellen's Jackson Hole speech

NEW YORK (Reuters) - The dollar slipped on Thursday as some investors squared positions before the annual global central bankers' gathering in Jackson Hole, Wyoming, where Federal Reserve Chair Janet Yellen may offer new guidance on U.S. monetary policy.

Recent upbeat statements on the U.S. economy by Fed officials including Vice Chairman Stanley Fischer and New York Fed President William Dudley have prompted investors to raise bets interest rates will increase sooner rather than later. Some believe Yellen could echo their signals.

"Our expectation is that a hawkish message from Fed Chair Yellen this week will pave the way for a September hike, which should help the U.S. dollar recover some ground," said Daniel Katzive, head of North America FX strategy at BNP Paribas in New York.

"However, we do not expect the Fed to signal or embark on a series of rate hikes, which should limit the extent to which U.S. real yields can recover from current low levels."

U.S. data on Thursday added to the bullish outlook on interest rates, with a 1.6 percent rise in a key measure of U.S. durable goods orders for July and a fall in initial weekly jobless claims.

After the release of the U.S. data, futures markets were indicating a 24 percent chance the Fed will hike rates at its policy meeting next month and a roughly 57 percent chance of an increase in December, according to the CME Group's FedWatch.

Some analysts, however, believe Yellen could stick to her dovish stance. U.S. data, while solid of late, are not strong enough to warrant a rate increase this year, they said.

"The U.S. economy is doing better than most, but it's not on fire," said John Doyle, director of markets at Tempus Consulting in Washington. "Inflation is still super low. So the Fed does not really need to raise rates right now."

In late trading, the euro rose 0.3 percent against the dollar to $1.1293 . The euro rose despite a weak German IFO survey showing German business morale deteriorated sharply in August.

The dollar was flat against the yen at 100.49 yen , having dipped below 100 in recent days. The pair has traded in a narrow 99.55-102.83 band this month, but some traders said it could stage a rally if Yellen laid the ground for a rate hike.

The yen could also come under pressure on growing expectations the Bank of Japan will take additional stimulus steps at its next meeting in September.

(Reporting by Gertrude Chavez-Dreyfuss; Editing by Meredith Mazzilli and Chizu Nomiyama)