Dollar hits 14-month high against yen, euro rebounds

Given an absence of market-moving data in Europe and Asia, the theme of firmer dollar is likely to remain dominant today.

Dollar strengthened in Europe, hitting a fresh six year highs against the yen as heightened expectations for an early hike in U.S. interest rates continued to underpin demand for the greenback.

Dollar extended gains against the Japanese yen, pushing the USDJPY pair to trade at ¥106.639 after opening at ¥106.187, while hitting intraday high at ¥106.037.

Expectations that the Federal Reserve is growing closer to raising interest rates have boosted the dollar against the euro and the yen, with other central banks looking likely to stick to a looser monetary policy stance.

Euro managed to halt its slide against the greenback in Europe on Wednesday after previously slumping to a 14-month trough on Tuesday.

Euro rebounded Wednesday, trading at $1.29483 compared to opening level of $1.29383.

The euro fell sharply after the European Central Bank (ECB) unexpectedly cut rates to record lows across the Eurozone last week and unveiled new easing measures.

Sterling also saw a small rebound off 10-month low set in the previous session despite the ongoing fears over Scottish independence.

The Australian dollar fell to a third session, extending losses as investors seemed to be reprising the risk of an earlier U.S. interest rate hike ahead of next week`s FOMC meeting.

As of 12:52 GMT+3, the AUDUSD pair traded lower at $0.91398 after starting the day at $0.91972.

China`s inflation figures will take center stage on Thursday.