The Euro increased on the likelihood of a 50-basis point rate hike at the European Central Bank's (ECB) upcoming meeting next week.

The single currency surpassed $1.10 overnight and, at the time of writing, was trading at $1.1056 in Asia.

According to European Central Bank board member Isabel Schnabel, a 50-basis point rate rise was still on the cards, and would be dependent on data, particularly inflation figures due to be published two days before the May meeting, Politico reports.

However, in contrast, French ECB policymaker Francois Villeroy de Galhau urged further hikes to be limited in terms of size and number. Yet markets are focusing on the fact that additional increases are anticipated.

Futures pricing indicates around a 2/3 chance of a 25-basis point hike by the ECB, and a 1/3 chance of a 50-basis point rise, Reuters reports.

"It's not fully priced in yet, so if the ECB does go 50, then it will be Euro supportive. I think that's what's being reflected in the market," said Bank of Singapore currency strategist Moh Siong Sim.

Furthermore, the Euro reached an eight-year high at 148.47 Yen as the new governor of the Bank of Japan (BOJ), Kazuo Ueda, has signalled there's no rush to adjust policy. The BOJ meeting underway this week comes to an end on Friday and is the first with Ueda in charge.

The Yen held steady against the Dollar and, at the time of writing, was trading at 134.28 per Dollar.

In addition, the Dollar index declined 0.4% overnight to fall to a 10-day low of 101.19 in early Asia trade, the Reuters report adds.

In Australia, the Dollar dipped slightly to $0.6676 ahead of Wednesday's inflation data. The New Zealand Dollar, however, enjoyed a slight rally to trade at $0.6170 on Tuesday, just over its 200-day moving average.