(Recasts after European markets open)
* Dollar on track for strongest week in a month
* European stocks recover after Brussels attacks
* Sterling hit by Brexit concerns
* Credit Suisse cost cuts help shares
By Patrick Graham
LONDON, March 23 (Reuters) - The dollar crept towards its
strongest week in a month on Wednesday as markets rethought the
outlook for U.S. interest rates after a series of Fed officials
encouraged expectations of at least two more quarter point rises
this year.
The optimism that implies about the outlook for economic
growth, allied to some solid sentiment surveys on Tuesday and a
positive reaction to cost cuts by banking giant Credit Suisse,
helped European stock markets into the black.
Oil prices, however, were around 1 percent lower and the
risks that a stronger dollar and higher Federal Reserve rates
bring for the developing world helped end a five-day winning
streak for emerging market stocks.
U.S. futures pointed to a flat opening on Wall Street.
1YMc1 NQc1
"Market pricing for Fed tightening continues to tentatively
rebuild," strategists from French bank BNP Paribas (PA:BNPP) said in a
note to clients.
"Our expectation, however, is that the risk environment will
ultimately be unable to sustain pricing for a series of Fed
tightenings."
Last week the Fed cut in half the number of rate hikes it
predicts for the rest of this year, weakening expectations for a
move in either April or June.
But in the past two days several officials have shored up
the case for pushing on regardless of the volatility that has
gripped financial markets this year.
Importantly, comments by Chicago Fed President Charles Evans
suggested market pricing for just one more hike this year falls
short of what one of the least aggressive supporters of tighter
policy thinks is appropriate.
The dollar was up a quarter of a percent against the basket
of currencies used to measure its broader strength and by more
half a percent against commodities-linked units like the
Australian and New Zealand dollars, South African rand and
Norwegian crown. NZD= AUD= NOK= ZAR=
STOCKS UP
A handful of firmer-than-expected readings of business
sentiment in Europe on Tuesday had already helped markets resist
deeper falls following the bomb attacks in Brussels.
A shakier tone in Asia .MIAPJ0000PUS swiftly gave way to
gains for German, French and British stocks, helped by a vote of
approval for cost cuts announced by one of Switzerland's two big
international banks, Credit Suisse. CSGN.S
The pan-European FTSEurofirst 300 index .FTEU3 rose 0.4
percent.
"A sign of resilience and perhaps a degree of pent-up
tolerance to such tragic events has led to a flat to mildly
positive opening in Europe," said Brenda Kelly, head analyst at
London Capital Group.
"(But) I would not say that risk is definitively back on."
Britain's pound was the bigger loser among major currencies
after the Brussels attacks, hit by concern that it would bolster
the campaign for a vote to leave the European Union in June's
"Brexit" referendum.
It was back on the defensive against the dollar on Wednesday
and derivatives allowing investors to insure themselves against
sharp moves in sterling exchange rates ahead of that vote
reached their highest since 2010 elections. GBPVOL= GBP/