(Updates to U.S. trading, changes dateline; previous LONDON)
* Dollar up as markets respond to prior week's selloff
* Pro-Brexit minister's resignation hurts pound
* Yen slides, dollar index steady
* Eyes on Federal Reserve speakers in light data week
By Dion Rabouin
NEW YORK, March 21 (Reuters) - The dollar edged up on Monday, bouncing back from a more than 1 percent loss against major currencies last week as investors shook off dovish statements from the Federal Reserve.
A slide in sterling on rising 'Brexit' fears also buoyed the dollar.
Monday's move higher in the dollar added to Friday's gains that followed a two-day selloff in the greenback. The rally was prompted by the Fed reducing its rate hike outlook for the year and statements from Chair Janet Yellen that made note of potential risks to the global economy.
"It looks to me like we have dissipated the dollar weakness from the Fed," said Joseph Trevisani, chief market strategist at Worldwide Markets in Woodcliff Lake, New Jersey.
"It's taken a few days to run out and markets seem to be reassessing on the downside as far as the euro and the other currencies go. I don't think it's moved yet, but the Fed dovishness has played out."
The British pound sank more than half a percent on concerns that a split in the ruling Conservative Party is deepening ahead of June's referendum on EU membership.
The dollar index .DXY , which measures the U.S. currency's strength against a basket of its peers, rose 0.15 percent to 95.200 after falling for a third straight week.
Worries about Prime Minister David Cameron's ability to keep his Conservative party together and keep Britain in the European Union jumped after Iain Duncan Smith, a leading voice for the UK to exit the EU, resigned from the cabinet late on Friday.
The pound fell 0.7 percent in morning U.S. trading against the dollar to $1.4397 GBP=D4 .
"Sterling does not normally react strongly to UK politics so this is probably due to Brexit," said Richard Benson, head of portfolio investment at currency managers Millennium Global.
"The referendum is just making people focus on issues like this a lot more. It is down in response this morning."
In a week shortened to four days by the Good Friday holiday and light on U.S. economic data, dealers said the main focus was likely to be guidance from individual Federal Reserve policymakers.
Atlanta President Dennis Lockhart speaks later on Monday with Philadelphia Fed President Patrick Harker set to speak on Tuesday and Wednesday.
The dollar turned positive against the yen JPY= early in the session, rising 0.2 percent to 111.78 yen.
The euro EUR= fell 0.1 percent against the dollar to $1.1256.