Investing.com - The U.S. dollar slipped slightly lower in European trade Wednesday, but remained near an over four-month peak as traders remained on edge over the path of U.S. interest rates. 

At 04:55 ET (08:55 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 104.505, having climbed to a near five-month high of 105.10 on Tuesday.

Speeches by Fed officials in focus

The dollar has seen a little consolidation Wednesday after a run of resilient economic data resulted in traders reining in expectations of early interest rate cuts by the Federal Reserve.

Traders now expect around 75 basis points worth of rate cuts by the Federal Reserve this year, in line with the central bank's projections, with the start of an easing cycle only fully priced in for July.

There is more economic data to digest Tuesday, including the report and the , but investors are likely to concentrate their attention on a slew of central bank speakers, including Federal Reserve Chair Jerome Powell.

Powell said on Friday that the latest U.S. inflation data is "along the lines of what we would like to see.” These comments were largely in line with his dovish remarks after the Fed's policy meeting last month, which had the markets expecting a rate cut in June. 

Analysts at Macquarie advised traders earlier this week to stay long the greenback with more gains possible.

This week’s speeches by Federal Reserve officials could be a new catalyst for dollar gains, Macquarie said, in a note, “as they may indicate that Powell's dovishness is not representative of the Fed's nineteen dots, nor the FOMC median — which is more hawkish.” 

Sterling, euro edged higher

In Europe, rose 0.1% to 1.0773, firming away from the over one-month low hit in the previous session, ahead of the release of the latest eurozone inflation data.

The annual is expected to rise 2.5% in March, from 2.6% the prior month, while excluding volatile components, are expected to rise 3% in March, easing from a 3.1% rise in the previous month.

Austrian policymaker Robert Holzmann, often seen as a hawk, said earlier Wednesday in an interview with Reuters, that the European Central Bank could start cutting interest rates in June as inflation may fall quicker than expected, but should not get too far ahead of its U.S. counterpart, as that diminishes the potency of easing.

rose marginally to 1.2578, bouncing after recent losses.

Yen steadies after recent losses

traded 0.1% higher at 151.69, with the Japanese yen steadying after recovering a measure of recent losses.

While pressure from the dollar and the prospect of higher-for-longer U.S. interest rates drove the yen to a 34-year low last week, it recovered some ground after several top Japanese officials warned of currency market intervention to support the yen.

rose 0.1% to 7.2358, with the yuan taking little comfort from a private survey showing that China’s services sector grew as expected in March.

The pair remains easily above the key 7.2 level, indicating that sentiment towards the yuan remained fragile.