FOREX-Dollar firmer, buoyed by Fed stimulus withdrawal hopes
* Dollar climbs, no surprises from Bernanke
* U.S. Treasury yields lower, to check sharp dollar gains
* Euro/yen at 7-wk high before Japan's upper house election
LONDON, July 18 (Reuters) - The dollar rose against a basket of major currencies on Thursday as investors bet U.S. economic data would support plans by the Federal Reserve to move away from ultra-loose monetary policy soon. But Treasury yields were lower, making a sharp rally in the dollar - especially against the euro and the British pound - unlikely, traders said. The dollar had been boosted by higher U.S. yields but doubts over when the Fed will start withdrawing stimulus has kept it clear of three-year high struck on July 9. In congressional testimony on Wednesday, Fed Chairman Ben Bernanke said the central bank still expected to start scaling back its bond purchase programme later this year, but left open the option of altering that plan if the economic outlook changed. The dollar index edged up 0.2 percent to 82.8936 on Thursday, staying above a three-week low of 82.342 set on Wednesday. The euro slipped 0.2 percent to $1.3100 , while sterling fell 0.3 percent to $1.5160. "We are bullish dollar but we are getting mixed signals from the Fed," said Peter Kinsella, currency strategist at Commerzbank. "Fed tapering will be very data-dependant and if we get good jobs data next month, then we can expect stimulus withdrawal by September. Otherwise expectations of tapering will be pushed back to December. This uncertainty should keep it rangebound." Bernanke is seen likely to stick to Wednesday's themes when he testifies to the Senate Banking Committee later on Thursday. Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo, said he expected the dollar to head higher gradually, given the divergent monetary policy outlook for the United States and other rich countries. "But if you ask whether there will be a sudden move higher in the dollar in the near term, I don't see anything that could have that kind of an impact," Maeba said. The dollar rose 0.7 percent to 100.305 yen with hedge funds cited as buyers and stop-loss buy orders layered at 100.50 and 101.00 yen, traders said. The euro rose to a seven-week high of 131.45 yen with hedge funds cited as sellers of the Japanese currency before upper house elections on Sunday. Opinion polls show Prime Minister Shinzo Abe's ruling bloc on track for a big win. That would give Abe more freedom to push forward his agenda to revive the economy through aggressive monetary easing and hefty government spending, keeping the yen under pressure.