* Dollar drifts higher, no surprises from Bernanke * Fed expects to trim bond buying; not on preset course * Dollar seen staying firm as Fed heads toward QE tapering By Masayuki Kitano SINGAPORE, July 18 (Reuters) - The dollar rose on Thursday after remarks from Federal Reserve Chairman Ben Bernanke kept intact expectations that the Fed would be first among the major central banks to move away from ultra-loose monetary policy. Bernanke, in testimony to Congress on Wednesday, said the Fed still expects to start scaling back its massive bond purchase programme later this year, but he left open the option of altering that plan if the economic outlook changes. Hiroshi Maeba, head of FX trading Japan for UBS in Tokyo, said he expected the dollar to head higher gradually, given the divergent monetary policy outlook for the United States and other countries. "But if you ask whether there will be a sudden move higher in the dollar in the near term, I don't see anything that could have that kind of an impact," Maeba said. The dollar index, which tracks the greenback's performance against a currency basket, edged up 0.2 percent to 82.860 , staying above a three-week low of 82.342 set on Wednesday. Bernanke will testify before the Senate Banking Committee later on Thursday, but is seen likely to stick to the themes put before the House Financial Services Committee. The euro slipped 0.2 percent to $1.3097, while the Australian dollar fell 0.6 percent to $0.9177. A U.S.-based currency trader sounded a note of caution over about the dollar's outlook, saying some appreciation had already been priced in. "Any back-stepping by the Fed will cause big waves," the trader added. The dollar rose 0.5 percent to 100.10 yen. The greenback is likely to get a lift once the Fed starts tapering its bond buying programme, said Daisuke Karakama, market economist at Mizuho Bank in Tokyo. "I don't know if it will be September or October, but once the reduction of QE (quantitative easing) starts, U.S. yields will head higher and we may even start to see a clear rise in short-term yields," he said. Later this year, the dollar may test a 4-1/2 year high of 103.74 yen set back in May, although a rise to 104.00 yen seems unlikely, Karakama said. One event risk for the yen is Japan's upper house elections on Sunday. Recent opinion polls keep Prime Minister Shinzo Abe's ruling bloc on track for a big win. That outcome would give Abe more freedom to push forward his agenda to revive the economy through aggressive monetary easing, hefty government spending and structural reform. While the yen might slip on Monday if Abe's ruling bloc gains a large majority in the upper house as expected, a sustained bout of yen-selling on such an outcome seems unlikely, market players said.

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