FOREX-Dollar takes a pause after rally, rate hike view in focus

* Dollar index takes breather after Tuesday's rally

* Fed official suggests two hikes possible this year

* Euro back around $1.1200, buffeted by Greek headlines (Updates prices, adds Greek reports, reaction)

By Anirban Nag and Patrick Graham

LONDON, June 24 (Reuters) - The dollar index eased on Wednesday after hitting its highest in over a week as U.S. 10-year Treasury yields dipped, with investors' focus slowly shifting from Greece to prospects for higher U.S. interest rates.

The index shed 0.3 percent to 95.155. On Tuesday it had climbed to 95.636, its highest level since June 12. It held onto the bulk of the gains made on Tuesday, when it climbed 1.2 percent -- its best daily performance since late May.

Reasonably good U.S. data, comments from Federal Reserve Governor Jerome Powell, who said he was prepared to raise interest rates twice this year, and higher U.S. yields boosted the dollar on Tuesday.

"We had a pretty big move up in the dollar so it's natural that there is a pause, especially with the U.S. calendar a bit empty and little in store to push Treasury yields higher today," said Niels Christensen, FX strategist at Nordea.

The only data of note from the United States on Wednesday is the final estimate of first-quarter gross domestic product, which is expected to show that the economy contracted less compared to the earlier estimate. Traders said the final estimate is usually not a market-mover but could prove positive for the dollar.

Headlines pointing to the remaining differences between Greece and its euro zone creditors pulled the euro off morning highs, but it was still up 0.3 percent at $1.1200, regaining a bit of ground after sliding 1.5 percent on Tuesday.

Prime Minister Alexis Tsipras flew to Brussels to meet euro zone officials on Wednesday to try to bridge gaps on key elements of the proposals made by his left-wing government to shore up state finances in return for vital loans.

Athens had proposed increasing VAT, corporate tax and pension contributions in order to meet budget targets, but Tsipras told aides that creditors had not accepted the revenue-raising measures, a Greek government official said.

"Regarding Greece, there is still time," said Tobias Davis, corporate hedging manager with Western Union in London. "I'm seeing some euro buying. From a low of 1.1178 post the (headlines on) rejection of Tsipras's proposals, we are now knocking on 1.12 again."

The euro has proved extremely resilient to Greece's travails so far, and Mitul Kotecha, head of Asia-Pacific FX strategy for Barclays (LSE: BARC.L - news) in Singapore, said the market seemed to be shifting its focus back to underlying factors such as the divergence in the monetary policy stances of the Fed and the European Central Bank

"Investors seem to be once again pushing Greece into the background, which I think ... means the focus shifts back to fundamentals and hence we're seeing this resumption of dollar strength," he said.

Tsipras meets European Central Bank President Mario Draghi, IMF head Christine Lagarde and European Commission President Jean-Claude Juncker on Wednesday afternoon before a 1700 GMT meeting of the Eurogroup of finance ministers. (Editing by Catherine Evans)