GLOBAL MARKETS-Dollar resumes climb after Yellen underscores U.S. job woes

* Dollar index touches 2014 high

* European shares wobble as Russia convey enters Ukraine

* Treasuries yields rise

(Adds dollar gains, Wall Street open; changes dateline;

previous LONDON)

By Michael Connor

NEW YORK, Aug 22 (Reuters) - The high-flying dollar moved

higher again on Friday after Federal Reserve Chair Janet Yellen

said the worrisome U.S. labor markets requires policymakers to

move cautiously when eyeing interest rate hikes.

The U.S. dollar index, which values the greenback

against a basket of a half dozen major currencies, was up 0.31

percent after reaching a new 2014 high of 82.413. The euro

was off 0.35 percent against the dollar at $1.323.

Tensions over Ukraine increased and blunted a European

stocks run-up, and U.S. Treasury yields edged up as Yellen spoke

at a central bankers meeting in Wyoming.

U.S. stocks were mixed in morning trading.

The labor market is still bruised from the Great Recession

and the Fed should move cautiously in determining when interest

rates should rise, Yellen said. The jobless rate has fallen more

quickly than expected, but Yellen said the economic disruption

of the last five years has left millions of U.S. workers

sidelined, discouraged or stuck in part-time jobs - facts not

captured in the unemployment rate alone.

In such an environment "there is no simple recipe for

appropriate policy," Yellen said, arguing for a "pragmatic"

approach that allows officials room to evaluate data as it

arrives without committing to a preset policy path.

At the same time, she said the labor market may in fact be

tighter than it seems and the Fed may have to raise rates sooner

and faster than expected.

Higher interest rates tend to boost the allure of the dollar

as they raise the yield on some U.S. assets.

"On balance, the speech was a very gradual and nuanced move

away from Yellen's overtly dovish policy stance in the past

toward a more balanced view on the economy and on monetary

policy," said Omer Esiner, chief market analyst at Commonwealth

Foreign Exchange in Washington.

On Wall Street, which was flat ahead of Yellen's speech,

the Dow Jones industrial average fell 14.39 points, or

0.08 percent, at 17,025.10. The Standard & Poor's 500 Index

was down 2.34 points, or 0.12 percent, at 1,990.03. The

Nasdaq Composite Index was up 5.56 points, or 0.12

percent, at 4,537.66.

European shares were heading for their biggest

weekly gain since February but dipped 0.33 percent after a

Russian convoy of aid trucks entered eastern Ukraine without

Kiev's permission.

Fears the conflict would worsen before next week's meeting

between Vladimir Putin and Ukraine President Petro Poroshenko

boosted safe-haven assets, but not enough to distract markets

from the main focus of when cheap and easy credit is likely to

come to an end.

News (Other OTC: NWSAL - news) the Red Cross was also not moving into Ukraine with the

Russian trucks as planned triggered stock

selling in London, Frankfurt and Paris.

Shares (Frankfurt: DI6.F - news) in Moscow tumbled about 1.5 percent to bring

this week's rally to an abrupt halt, and the rouble also

fell.

Asian share markets had hitched a ride overnight on another

record close for Wall Street to end at a six-and-half-year high.

Yields on U.S. Treasuries rose, with the bellwether 10-year

note rate at 2.419 percent from 2.409 at Thursday's close.

In contrast, worries about the euro zone slipping toward

deflation and near-zero growth pinned German 10-year government

bond yields firmly below 1 percent on Friday.

In commodities trading, spot gold rose 0.16 percent

to $1,276 an ounce, after losing 1.3 percent on Thursday as rate

rise expectations sent it plowing through key support levels to

a two-month low.

Copper, finely tuned to China's fortunes, was near a

seven-week high.

Oil eased as the strong dollar and plentiful supplies

continued to pressure prices. October Brent crude was

down 32 cents to $102.31 a barrel. U.S. crude was down 83

cents at $93.13 a barrel

(Reporting by Michael Connor in New York; Editing by Dan

Grebler)