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FOREX-Dollar breaks out to 11-month highs, eyes on Fed

* Dollar breaks out of August range

* All eyes on Fed minutes, Jackson Hole speeches

* Trade-weighted index at 11-month high, euro falls below $1.33

* At four-month highs vs yen, sterling (Updates after start of European trade, changes dateline from previous TOKYO/SINGAPORE)

By Patrick Graham

WARSAW, Aug 20 (Reuters) - The dollar reached an 11-month high against the euro and a basket of major currencies on Wednesday, buoyed by optimism over the health of the U.S. economy.

The greenback broke through resistance around $1.3300 and last November's high of $1.3295 per euro in morning trade in Europe. It also climbed to a 4 1/2-month high against the yen.

Dealers and analysts said signals from the U.S. economy and policy establishment - on Wednesday, minutes from the Federal Reserve's last meeting - would probably define whether the dollar pushed higher.

It has gained some 7 cents, or just under 5 percent, against the euro since early May. The gains suggest the broader rally predicted at the start of this year by some of the biggest investment houses may finally be under way.

"The dollar can retain its bid tone into the end of the week," said Stephen Gallo, a strategist with Canadian bank BMO in London, pointing to rising U.S. housing starts on Tuesday and steady US bond yields this week.

The dollar index rose as high as 82.078, its highest level since September. It last stood at 82.040, up 0.2 percent on the day.

The euro slid to an 11-month low of $1.3285 and the New Zealand dollar fell below support at levels near $0.8400 to its lowest level in more than five months.

The dollar also scaled four-month highs against the British pound, helped by a recovery in U.S. 10-year Treasury yields. They were last at 2.404 percent, compared with a 14-month low of 2.303 percent last Friday.


Some market participants said the dollar's rise had more to do with weakness in other major currencies. The euro remained on the defensive, and sterling extended its losses after weaker-than-expected inflation data on Tuesday eased pressure on the Bank of England to raise interest rates.

The euro has been hit by worries that tit-for-tat sanctions between the West and Russia could hurt the euro zone economy more than the United States because of its closer economic ties with Russia.

"I think it's more a function of European weakness ... The European recovery is stalling and as such the focus is on the ECB doing more to support the economy," said Callum Henderson, head of FX research for Standard Chartered Bank in Singapore.

Next up for the dollar are the minutes of the Fed's July policy meeting, due later on Wednesday. A bigger focal point may be Fed Chair Janet Yellen's speech on Friday at an annual gathering of central bankers in Jackson Hole, Wyoming.

"Our economists expect an overall dovish theme to persist but are wary that a softening in the disinflationary rhetoric might be in the offing given recent comments from FOMC members," RBC Capital Markets' Michael Turner said in a morning note. "The main game for Fed communications remains the upcoming Jackson Hole gathering." (Additional reporting by Masayuki Kitano in Singapore and Hideyuki Sano in Tokyo; Editing by Larry King)