Forex - U.S. dollar slightly higher vs euro Sydney morning, weaker vs yen

SYDNEY (Thomson Financial) - The U.S. dollar was trading slightly higher against major currencies mid-morning on Wednesday, partially recovering from overnight losses against the euro when expectations grew that the next move by European Central Bank (ECB) may be to hike rates.At 11:10 a.m. (0110 GMT), the dollar was at 103.01 yen from 103.03 yen in late trade in New York. The euro was at $1.5976 from $1.5995 in New York.Overnight, the euro traded to a fresh all-time high above $1.6000 at $1.6020 after another round of hawkish comments from ECB officials and a report saying that the ECB bias has turned more hawkish and may be forced to tighten again.The officials highlighted that lowering inflation remains their number one aim, despite the slowing growth in the region and financial market turmoil.These events were followed by another weak U.S. housing number for March and comments from Federal Reserve member Richard Fischer saying that he saw a prolonged period of anemic growth.John Noonan, a senior foreign exchange analyst at Thomson Reuters IFR Markets, said with the euro finally breaking through $1.60 overnight the market is now focused on possible intervention by the ECB."If the move is sustained it is likely to induce more verbal intervention from Eurozone officials," Noonan said.But, he said, verbal intervention is unlikely to discourage the market as there was a subtle shift in central bank expectations earlier in the week. "On Friday the consensus was that the Fed was just about done easing and the ECB might have to start easing some time later in 2008. This morning the popular view is that the ECB might have to hike one more time and the Fed might not be finished after they ease 25 basis points next week," Noonan said.He said regional central banks are continuing to buy the euro on dips against the dollar, which makes those holding long euro positions that much safer.In Asia today, Noonan said the big event will be the release of Australian first quarter consumer price index inflation data, to be released at 11:30 a.m. (0130 GMT).The Reserve Bank of Australia (RBA) has already signalled it expects a higher annual rise of about 4.0 percent in the headline CPI, while underlying measures of inflation will also be much greater than the 2-3 percent range the central bank aims to keep annual inflation within.Economists don't expect the RBA to hike rates next month if the CPI comes in around the expected level, as recent hikes to take the central bank's cash target rate to 7.25 percent are already beginning to cool domestic demand.But, Noonan said, a high number might induce the market to try and take out the 0.9500 level again, with cries of "parity" against the U.S. dollar growing louder again.At 11:10 a.m. the Australian dollar was at 94.62 U.S. cents.Sydney 11:10 a.m. (0110 GMT)U.S. dollar yen 103.01 yenSwiss franc 1.0038EuroU.S. dollar 1.5976yen 164.615 Swiss franc 1.6037pound 0.8003PoundU.S. dollar 1.9963yen 205.642Swiss franc 2.0042Australian dollar U.S. dollar 0.9462pound 0.4739yen 97.4250New Zealand dollar U.S. dollar 0.7977