TOKYO, July 14 (Reuters) - The U.S. dollar touched a three-month high versus the euro and a one-week high versus the yen on Wednesday, after heated U.S. inflation spurred bets of faster monetary policy tightening than Federal Reserve officials have so far signalled. The New Zealand dollar jumped more than 1% to as high as 70.235 U.S. cents after the Reserve Bank of New Zealand said Wednesday it would halt its large-scale asset-purchase programme, paving the way for a rate hike this year. "In a world where central bank divergence matters, the RBNZ has just put their head above the precipice and offered a green light for traders to buy the NZD," Chris Weston, head of research at broker Pepperstone, wrote in a note to clients.​​​​​​​ On Tuesday, the kiwi had sunk as low as 69.18 cents for the first time since November. read more The greenback strengthened to $1.17720 per euro , the highest since April 5, for a second day running, before slipping 0.1% to $1.17860. It rose to 110.70 yen for the first time since July 7, before pulling back 0.1% to 110.50. "Another hotter-than-expected U.S. CPI print has got the market wondering whether the lift in inflation will prove to be transitory or more enduring," Tapas Strickland, an analyst at National Australia Bank, wrote in a research note. "Markets have sided on the hawkish interpretation, bringing forward rate hike expectations to late 2022," leading to "broad-based gains" for the dollar, the note said. The dollar index , which measures the U.S. currency against a basket of six peers, edged 0.1% lower to 92.705 after earlier rising as high as 92.832 - just below the 92.844 level reached last week for the first time since April 5. U.S. consumer prices rose by the most in 13 years in June amid supply constraints and a continued rebound in the costs of travel-related services from pandemic-depressed levels as the economic recovery gathered momentum. read more Traders are now looking ahead to Fed Chair Jerome Powell testifying before Congress on Wednesday and Thursday for any signals on the timing of a tapering of stimulus and higher interest rates. Powell has repeatedly stated that higher inflation will be transitory, noting that he expected supply chains to normalise and adapt. read more Elsewhere, the Canadian dollar edged 0.1% higher to C$1.2503, still close to a 2-1/2-month low of C$1.2590 hit last week, following its biggest decline in a week on Tuesday. The Canadian central bank is due to update its economic forecasts at a policy announcement later on Wednesday, with further tapering of asset purchases expected. read more The Australian dollar , often seen as a proxy for risk appetite, gained 0.2% to 74.60 U.S. cents, pulled higher by gains in the kiwi. Sterling rose 0.1% to $1.38245, clawing back some of Tuesday"s 0.5% slide. ======================================================== Currency bid prices at 0601 GMT Description RIC Last U.S. Close Previous Session Pct Change YTD Pct Change High Bid Low Bid Euro/Dollar $1.1788 $1.1777 +0.09% -3.52% +1.1790 +1.1772 Dollar/Yen 110.5050 110.6400 -0.12% +6.99% +110.6950 +110.4550 Euro/Yen 130.25 130.28 -0.02% +2.62% +130.3500 +130.1300 Dollar/Swiss 0.9180 0.9186 -0.04% +3.79% +0.9192 +0.9182 Sterling/Dollar 1.3834 1.3814 +0.16% +1.27% +1.3837 +1.3802 Dollar/Canadian 1.2503 1.2514 -0.10% -1.82% +1.2525 +1.2497 Aussie/Dollar 0.7459 0.7444 +0.19% -3.05% +0.7467 +0.7436 NZ Dollar/Dollar 0.7014 0.6948 +0.97% -2.31% +0.7023 +0.6940 All spots Tokyo spots Europe spots Volatilities Tokyo Forex market info from BOJ Reporting by Kevin Buckland; Editing by Jacqueline Wong and Stephen Coates Our Standards: The Thomson Reuters Trust Principles.