* Euro wallows not far from 7-month lows

* Speculators raise dollar-long positions -IMM data

* Market pricing in around 70 pct chance of Fed Dec hike

TOKYO, Oct 24 (Reuters) - The dollar edged up to a fresh eight-month high against a basket of currencies in Asian trade on Monday, buoyed by expectations that the U.S. Federal Reserve will raise interest rates this year.

The dollar index, which tracks the greenback against a basket of six major counterparts, added 0.1 percent to 98.818 .DXY= after rising as high as 98.846, which was its loftiest peak since Feb. 3.

On Friday, San Francisco Fed President John Williams said at a mortgage conference that "it makes sense to get back to a pace of gradual rate increases, preferably sooner rather than later." urn:newsml:reuters.com:*:nL1N1CR1HW

His comments followed recent hawkish talk from central bank officials including New York Fed President William Dudley and Fed Vice Chair Stanley Fischer, which prompted investors to price in an interest rate increase this year.

Interest rates futures imply about a 70 percent chance that the Fed will hike interest rates in December.

Speculators raised their bets on the U.S. dollar for a fourth straight week, with net long positions hitting their highest since late January, Reuters calculations and data from the Commodity Futures Trading Commission showed on Friday. IMM/FX

The value of the dollar's net long position rose to $18.44 billion in the week ended Oct. 18, from $14.72 billion the previous week.

Another factor underpinning the dollar was recent opinion polling that favoured Democratic candidate Hillary Clinton to win the Nov. 8 U.S. presidential election, defeating Republican Donald Trump.

Options positions on the U.S. stock market suggested investors are pricing in a Clinton victory. Positioning data on options tied to the benchmark S&P 500 index .SPX showed little pickup in demand for contracts that would offer investors downside insurance in the event that stock prices take a major hit right after the Nov. 8 election. urn:newsml:reuters.com:*:nL1N1CR1AS

Dramatic news about either candidate could lead to foreign exchange market swings, said Shinichi Kashiwagi, head of market sales for Japan at National Australia Bank in Tokyo, and otherwise, "we need to wait until U.S. GDP on Friday."

Disappointing U.S. growth figures might lead investors to pare their expectations of a December hike.

The euro was down 0.2 percent at $1.0863 EUR= , inching back toward Friday's low of $1.0857, its lowest since March 10.

"The main consideration seems to be the contrast between Fed officials like Fischer and Dudley who have been signalling a rate hike before the end of the year, while the ECB has arguably signalled a likely extension of its asset purchases," wrote Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.

The European Central Bank kept interest rates at historic lows last Thursday and ECB President Mario Draghi kept the door open for more stimulus, quashing speculation that the bank was poised to taper its 1.7 trillion euro asset-buying programme. urn:newsml:reuters.com:*:nL8N1CQ1WB

The next immediate target for the euro is $1.08, and then $1.0710, with "an increasing chance of seeing a move closer to $1.05 before the end of the year," Chandler said.

Against its Japanese rival, the dollar added 0.2 percent to 103.97 yen JPY= .

"We'll probably see narrow range-trading today, with an options barrier at 104 yen," said Kaneo Ogino, director at foreign exchange research firm Global-info Co in Tokyo.

Data issued early on Monday showed Japan's trade balance at a surplus of 498.3 billion yen ($4.8 billion), versus the median estimate of a 341.8 billion yen surplus. urn:newsml:reuters.com:*:nL4N1CQ3WS

But the yen's recent relative strength took a toll on exports, which fell for a 12th straight month.

China's offshore yuan CNH=D3 hit a fresh six-year low against the dollar, in line with the weakness of the onshore yuan after the dollar index's rise. urn:newsml:reuters.com:*:nL4N1CU15G

(Reporting by Tokyo markets team; Editing by Richard Pullin and Eric Meijer) ((lisa.twaronite@thomsonreuters.com;)(+81 3 6441 1870; Reuters Messaging: lisa.twaronite.thomsonreuters.com@reuters.net))