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FOREX-Dollar rally pauses as Jackson Hole takes centre stage

* Dollar rally loses steam as investors await Yellen's speech

* Yellen could counter hawkish tone in Fed minutes

* ECB's Draghi also due to speak at Jackson Hole (Updates prices, adds comments)

By Masayuki Kitano and Ian Chua

SINGAPORE/SYDNEY, Aug 22 (Reuters) - The dollar hovered just below its 2014 peak against a basket of major currencies on Friday, with bulls turning cautious ahead of a speech by Federal Reserve Chair Janet Yellen.

The dollar index held steady at 82.144, having risen as high as 82.364 on Thursday - a level last seen in early September.

It was still up nearly 0.9 percent so far this week and on track for its best weekly gain since late January. Upbeat U.S. housing data and a hawkish-sounding Fed minutes have combined to give the greenback a big boost.

This week's rally left the dollar on the verge of breaking above its April peak of 104.13 yen, a move that could open up the way to 105.45, set in January.

The dollar held steady at about 103.83 yen, not that far from a 4-1/2 month high near 103.97 yen on Thursday.

"Anything remotely less dovish than expected from Yellen should lift the dollar, and dollar/yen will be the front-runner there," said Jesper Bargmann, head of trading for Nordea Bank in Singapore.

"It has been consolidating for quite some time, and it looks like it is trying to establish a new uptrend," he said, referring to the dollar's moves against the yen.

The euro held steady near $1.3283, having bounced off an 11-month trough of $1.3242 set on Thursday, aided in part by a survey that showed Germany's private sector grew for a 16th month running in August.

Other currencies were also off their lows including the Australian dollar, which was last up 0.1 percent at $0.9312 , having pulled up from Thursday's 2-1/2 month low of $0.9235.

Traders said the risk to dollar bulls now is Yellen herself.

"After the hawkish bias to FOMC minutes, the dovish camp gets its chance to sound off at Jackson Hole," said Kit Juckes, strategist at Societe Generale.

Yellen is due to give a speech at the annual gathering of central bankers in Jackson Hole, Wyoming. The topic of this year's symposium is "Re-Evaluating Labor Market Dynamics".

Last month, Yellen stressed there was significant underutilization of labour resources, prompting markets to push back the timing of the first interest rate hike.

In addition to Yellen, European Central Bank President Mario Draghi will also be giving a speech at Jackson Hole on Friday.

Market participants said the dollar could slip if Yellen sounds dovish, but added that any fall in the greenback was likely to be mild.

"There could be some profit-taking, but at the same time I think the profit-taking could be quite shallow," said Sim Moh Siong, FX strategist for Bank of Singapore, referring to the outlook for the dollar against the yen.

One factor that could help temper gains in the dollar against the yen is the lack of more significant rises in U.S. bond yields, Sim said, adding that the dollar may struggle to rise above levels around 104.50 yen in the near term.

The U.S. two-year Treasury yield last stood at around 0.47 percent. While the two-year yield has edged up from a two-month low hit last Friday, it remains below a three-year high of 0.59 percent touched in late July.

(Editing by Shri Navaratnam and Richard Borsuk)