The Dollar held firm on Wednesday ahead of the release of U.S. consumer price data, whereas the Euro was flat against the greenback on reports a policymaker at the European Central Bank (ECB) said the rate hiking cycle was nearing an end. 

As traders awaited U.S. inflation data to help shore up Fed rate hike forecasts, governing council member of the ECB, Mario Centeno, said he forecasts inflation will decline again in March and the tightening process was coming to a close.

On Wednesday, the single currency remained near its strongest mark against the Dollar in seven months at $1.0733.

"Euro/Dollar remains gently bid, buoyed by expectations of a Fed U-turn in the second half of this year, China reopening and a belatedly hawkish ECB," according to ING head of currency strategy, Chris Turner.

Since hitting a 20-year peak in September, USD has lost close to 12% against the Euro, as investors started to forecast a fall in inflation and a weaker Dollar as the need for more rate increases diminishes.

During a panel discussion on Tuesday, Fed Chair Jerome Powell didn't offer any policy indications. Consequently, investors are firmly focused on U.S. consumer price data.

"Another downward surprise to the core CPI would cement the deceleration trend," said Commonwealth Bank of Australia strategist Joe Capurso.

"The U.S. Dollar would ease further because another soft core CPI would encourage markets to continue to shift pricing for the (Fed's) February meeting from a 50 basis point increase to a 25bp increase."

The Dollar index – measuring the greenback against six peers – increased 0.15% to 103.42, Reuters news agency reports.

Furthermore, the reopening of China has bolstered sentiment and led to gains for Asia's currencies against the Dollar. The Chinese Yuan fell just short of a five-month top of 6.7737 on Wednesday; Thailand's Baht has reached a nine-month high; and the Singapore Dollar has hit 19-month highs.