The dollar sank to a two-month low against its major peers on Wednesday in the lead-up to a key U.S. inflation reading, while sterling scaled a 15-month top on expectations the Bank of England (BoE) has further to go in raising rates.

U.S. inflation data is due later on Wednesday, with expectations core consumer prices rose 5% on an annual basis in June. The figures should also provide further clarity on the Federal Reserve's progress in its fight against inflation.

Ahead of the release, the U.S. dollar fell to a two-month low of 101.45 against a basket of currencies , extending its losses from the start of the week after Fed officials said the central bank was nearing the end of its current monetary policy tightening cycle.

The euro rose 0.07% to $1.1018, flirting near Tuesday's two-month high of $1.1027.

Elsewhere, sterling peaked at a 15-month high of $1.2940 in early Asia trade, bolstered by bets the BoE will have to tighten monetary policy further to tame British inflation that is running at the highest rate of any major economy.

The Japanese yen strengthened past the 140 per dollar level on Wednesday to peak at a one-month high of 139.54 per dollar, drawing some support from expectations that the Bank of Japan (BOJ) could tweak its controversial yield curve control (YCC) policy at its upcoming meeting this month.

Source : Reuters