* Dollar index consolidating just below 14-month peak

* Sterling and euro steadier after recent drubbing

* Commodity currencies sink anew overnight

By Ian Chua

SYDNEY, Sept 12 (Reuters) - The dollar hovered below a 14-month peak against a basket of major currencies early on Friday as the selloff in sterling and the euro tapered off, but commodity currencies remained under pressure.

The dollar index last traded at 84.262 after a flat close in New York. But it was within striking distance of Tuesday's high of 84.519 and is up 0.6 percent so far this week.

It also reached a six-year high on the yen at 107.20, and was last at 107.07.

Investors had bought the greenback ahead of the Federal Reserve's Sept 16-17 policy review amid some expectations that the central bank could signal an earlier rise to interest rates.

U.S. Treasury yields have been adjusting to that prospect with the two-year yield now not far from a three-year peak of 0.5900 percent set in July.

The rise in U.S. yields and a pick-up in implied volatility have taken a toll on carry currencies from the Australian dollar to those in emerging markets.

The Aussie skidded to a fresh six-month low of $0.9089 overnight, despite local data showing employment surged by the most on record in August.

"If we see a hawkish Fed next week, we'll be heading back to 90 cents in no time," said Annette Beacher, head of Asia-Pacific Research at TDSecurities.

The kiwi dollar hit a seven-month low of $0.8161, while the Canadian dollar plumbed a five-month low of C$1.1059 per USD, after breaking the 1.10 barrier.

Sterling and euro were steadier, although still trading heavily on domestic factors.

Jitters about a breakup of the United Kingdom has seen sterling slide more than 2 percent in the past two weeks. It skidded to a 10-month low of $1.6052 on Wednesday, but has managed to claw back to $1.6256.

Partly helping sterling rebound, a YouGov poll showed supporters of keeping Scotland in the United Kingdom gained back a narrow lead over separatists just one week before Scots vote in a referendum on independence.

The euro was at $1.2923, holding above a 14-month trough of $1.2859 set on Tuesday after the European Central Bank last week surprised markets with a fresh round of policy easing.

In comments published on Thursday, ECB Vice President Vitor Constancio said the ECB would prefer not to be forced to spend billions of euros buying government debt, a process known as quantitative easing, but it cannot rule it out.

There are no major economic data out of Asia on Friday, but China is scheduled to release its industrial output and retail sales figures on Saturday.

(Editing by Shri Navaratnam)