* Dollar index up, yen down vs dollar
* Fed speakers maintain case for tightening monetary policy
* UK GDP shrinks less than expected (Updates prices, adds comment)
By Elizabeth Howcroft
LONDON, Aug 12 (Reuters) - The dollar rose on Friday but was still set for a weekly decline as traders looked for signs of U.S. inflation peaking.
U.S. inflation figures on Wednesday and Thursday were lower than expected, boosting riskier assets such as equities and weakening the dollar, as markets interpreted the data as indicating the Fed could be less aggressive in rate hikes.
But Fed officials made clear they would continue to tighten monetary policy. San Francisco Federal Reserve Bank President Mary Daly said on Thursday she was open to the possibility of another 75 basis point (bp) hike in September to fight too-high inflation.
At 1047 GMT, the dollar index was up 0.4% on the day at 105.520, changing course after four days of losses that have put it on track for a weekly decline of 1%.
The yen lost out to the dollar's strength, with the U.S. unit up 0.5% against the Japanese currency at 133.62.
Traders were pricing in around a 36.5% chance of a 75 bps Fed rate hike in September and a 63.5% chance of 50 bps.
"We think it will take far more evidence of slowing core inflation to temper Fed tightening," Paul Mackel, global head of FX research at HSBC, said in a note to clients.
"Inflation is also a global problem not just a U.S. one, and so global growth and inflation dynamics will also drive the USD," Mackel said.
"The likes of the ECB (European Central Bank) and the BoE (Bank of England) may still find it hard to match market pricing for rate hikes, creating downside pressures for EUR and GBP."
Kit Juckes, head of FX strategy at Societe Generale, said dollar trading was likely to remain "choppy".
“It’s not going to be going significantly weaker in a straight line because there’s still a danger than the market has to reprice terminal Fed funds higher, given there’s still plenty of inflation,” Juckes said.
The British pound was down 0.8% at $1.212 versus the strong dollar. UK GDP contracted by less than feared in June, even though an extra public holiday had been expected to cause a big drag.
The euro was down 0.3% at $1.0291. French inflation was up 6.8% year-on-year in July, while for Spain the figure was 10.8%, the highest since 1984, data showed.
The euro has been weighed down by Europe's struggles with the war in Ukraine, the hunt for non-Russian energy sources, and a hit to the German economy from scant rainfall. Low water levels on the Rhine, Germany's commercial artery, have disrupted shipping and pushed freight costs up more than five-fold.
Commerzbank said in a note to clients it had revised its euro-dollar forecast lower, as it expects a euro-area recession as a base scenario, having previously been a "risk scenario". Commerzbank expects the euro to fall to $0.98 in December and to not recover until later in 2023.
Inflation in Sweden eased to 8% year-on-year in July, which ING said may lessen expectations for a massive Riksbank rate hike in September.
"After a good run in July, we doubt the Swedish krona pushes on too much further against the euro," ING's Turner said.
The New Zealand dollar was lifted by expectations of a Reserve Bank of New Zealand rate rise next week.
(Reporting by Elizabeth Howcroft; Editing by Mark Potter and David Holmes)