* Powell testimony, central banker speeches keep markets edgy
* Traders brace for German, Italian political developments
(Recasts, adds analyst comment, FX table, updates prices, changes byline, dateline; previous LONDON) NEW YORK, Feb 26 (Reuters) - The dollar inched higher on Monday in choppy trading ahead of a slew of U.S. economic data and events this week, including Federal Reserve Chairman Jerome Powell's testimony, which could determine whether the greenback's recovery from a three-year low can be sustained. The prospect of further interest rate increases by the Federal Reserve, more than what the market has initially priced in, has bolstered the dollar in the last few weeks. Concerns about rising inflation after a prolonged period of stagnant price gains have raised the possibility that the Fed could tighten more than expected this year and the next, an expectation that has boosted Treasury yields and lifted the dollar. Since the dollar index hit a three-year trough more than a week ago, the U.S. currency has risen 1.4 percent and is tracking nearly 1.0 percent in gains for the month of February, after losses of more than 3 percent in January. The focus this week is Powell's first congressional testimony. Powell will testify on the central bank's semiannual report on monetary policy and the economy on Tuesday before the U.S. House of Representatives Financial Services Committee.
Investors will be scanning Powell's comments for any signs that the central bank wants to raise rates faster to address inflationary pressures. "If Powell suggests that the Federal Reserve could raise U.S. interest rates four times in 2018, it could be seen as a positive sign for the U.S. dollar," said Jameel Ahmad, global head of currency strategy and market research at online brokerage FXTM. The dollar index was up 0.1 percent at 89.964. This week is also loaded with major U.S. data on consumer confidence, revised fourth-quarter growth, manufacturing and personal income and spending. Analysts also said investors were cautious about taking big positions this week due to political events in Europe. Italians vote in a national election on Sunday, while the leading political parties in Germany will decide on a coalition deal that could secure Angela Merkel a fourth term as chancellor. Euro zone inflation data due later this week further added to a nervous outlook for euro trading. European Central Bank President Mario Draghi spoke before the European Parliament on Monday and struck an optimistic tone about the euro zone economy. He said, however, that inflation has yet to show more convincing signs of a sustained upward adjustment. In late morning trading, the euro was little changed against the dollar at $1.2292. The dollar was also flat versus the yen at 106.90 yen .
Currency bid prices at 10:35AM (1535 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change
Euro/Dollar EUR= $1.2288 $1.2293 -0.04% +0.00% +1.2354 +1.2281 Dollar/Yen JPY= 106.8900 106.8800 +0.01% +0.00% +107.2800 +106.3800 Euro/Yen EURJPY= 131.35 131.39 -0.03% +0.00% +131.8500 +131.0900 Dollar/Swiss CHF= 0.9388 0.9366 +0.23% +0.00% +0.9388 +0.9326 Sterling/Dollar GBP= 1.3942 1.3965 -0.16% +0.00% +1.4069 +1.3939 Dollar/Canadian CAD= 1.2705 1.2628 +0.61% +0.00% +1.2708 +1.2616 Australian/Doll AUD= 0.7827 0.7842 -0.19% +0.00% +0.7893 +0.7829
Euro/Swiss EURCHF= 1.1536 1.1515 +0.18% +0.00% +1.1543 +1.1497 Euro/Sterling EURGBP= 0.8811 0.8799 +0.14% +0.00% +0.8819 +0.8772 NZ NZD= 0.7297 0.7288 +0.12% +0.00% +0.7345 +0.7278
Dollar/Norway NOK= 7.8324 7.8450 -0.16% +0.00% +7.8571 +7.7924 Euro/Norway EURNOK= 9.6249 9.6460 -0.22% +0.00% +9.6568 +9.6172 Dollar/Sweden SEK= 8.1727 8.1729 -0.06% +0.00% +8.1848 +8.1262 Euro/Sweden EURSEK= 10.0429 10.0490 -0.06% +0.00% +10.0565 +10.0198
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Tommy Wilkes in London; Editing by Jonathan Oatis)