Dollar eases on profit-taking after rising to a fresh 16-month high

The greenback retreated from a fresh 16-month high in tandem with U.S. Treasury yields on profit-taking and ended slightly lower against majority of its peers on Wednesday as investors are waiting for further clues from the Federal Reserves on policy of interest rate hike as early as mid-2020.  
  
Versus the Japanese yen, dollar extended its recent winning streak and rose to a fresh 3-year peak at 114.97 at Tokyo open. However, lack of follow-through buying triggered profit-taking and the pair tumbled to session lows of 113.94 in New York in tandem with US yields before staging a short-covering rebound to 114.19.  
  
The single currency fell briefly but sharply to a fresh 16-month trough at 1.1265 on 'stop-selling'. However, the pair swiftly erased its losses and recovered to 1.1332 ahead of New York open. The pair then retreated to 1.1294 before rebounding to 1.1326 in New York afternoon.  
  
The British pound also fell in tandem with euro to session lows at 1.3397 in Asian morning. The pair then jumped to 1.3480 (Reuters) at European open as data showed a spike in UK inflation before retreating sharply to 1.3417 in European morning. Cable then found renewed buying there and rose to an intra-day high at 1.3496 in New York afternoon due partly to cross-buying of sterling especially vs euro as well as renewed usd's weakness.  
  
Reuters reported British inflation surged to a 10-year high last month, according to data on Wednesday that will bolster expectations that the Bank of England will raise interest rates next month.    Consumer prices rose by 4.2% in annual terms in October, accelerating from a 3.1% increase in September. Both the BoE and a Reuters poll of economists - none of whom had predicted such a big increase - had pointed to a reading of 3.9%.       
The BoE is expected to become the first of the world's major central banks to raise rates since the coronavirus pandemic swept the global economy, with investors and economists increasingly predicting that will happen on Dec. 16.  
  
Data to be released on Thursday:  

New Zealand inflation forecast, Swiss trade balance, exports, imports, industrial production, U.S. initial jobless claims, continuing jobless c