FOREX-U.S. dollar edges higher as traders await clarity on Fed rate hike path

* Dollar rises slightly vs euro, yen

* Traders await more U.S. data for clues on Fed rate hike path

* Reduced European banking concerns cap euro losses (Updates prices, adds comments; changes byline, dateline, pvs LONDON)

By Sam Forgione

NEW YORK, Sept 28 (Reuters) - The dollar edged higher against the yen and euro on Wednesday, but gains were limited as traders awaited more U.S. economic data for clues on whether the Federal Reserve will hike rates this year, while reduced concerns over the European banking system limited the euro's losses.

Fed Chair Janet Yellen did not comment on the outlook for the economy or monetary policy in prepared testimony for a House of Representatives Financial Services Committee hearing.

Analysts said that, while traders were likely awaiting comments due later in the day from Kansas City Fed President Esther George and Cleveland Fed President Loretta Mester, they were putting more stake in upcoming data like next week's U.S. September non-farm payrolls report.

Mester and George would be watched closely since they were two of three dissenting policymakers at the Fed's meeting last week who said they preferred an immediate hike rather than the deferral until later in the year that most saw as appropriate.

"There is a lot of skepticism or cynicism about the Fed moving in December, so Fed hawks would need the backing of better data to clinch a move by year end," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, in reference to traders' anticipation of more economic data for clues on Fed policy.

Investors on Wednesday saw a 52 percent probability that the Fed would hike rates at the U.S. central bank's December meeting, according to CME Group (Kuala Lumpur: 7018.KL - news) 's FedWatch program.

The euro rose from a session low of $1.1182 touched in early trading, although the currency remained slightly lower on the day and was last down 0.2 percent against the dollar at $1.1189.

Analysts also said reduced concerns about the European banking system prevented the euro from tumbling, partly on optimism surrounding Deutsche Bank (LSE: 0H7D.L - news) .

Shares (Berlin: DI6.BE - news) of Deutsche Bank rose after Germany's largest bank sold its British insurance business Abbey Life to Phoenix Group Holdings as it sheds non-core assets and reduces its balance sheet in an effort to reassure anxious investors and meet regulators' demands.

The dollar index, which measures the greenback against a basket of six major currencies, was last up 0.29 percent at 95.705. The dollar was last up 0.26 percent against the yen at 100.69 yen and up 0.21 percent against the Swiss franc at 0.9727 franc. (Reporting by Sam Forgione; Editing by Meredith Mazzilli)