LONDON: The euro edged further away from a monthly high on Wednesday and the U.S. dollar nudged higher, lifted by higher Treasury yields as global inflation worries flared anew.

The dollar index, which measures the currency against six major peers, including the euro, rose 0.2% to 101.96, extending on Tuesday's gains, when data showed euro-area consumer inflation soaring to a record.

The euro was down 0.2% against the greenback, continuing to edge back from a one-month high of $1.0787, reached on Monday, when national CPI readings from the euro zone indicated a high inflation print for the bloc.

"Belgian, Spanish and German inflation data on Monday set the scene," said Jamie Dutta, market analyst at Vantage Markets.

"EUR/USD has approached the $1.08 level, coming back from the depths of $1.0348, so what we've seen is really a technical pullback," Dutta added.

The dollar index swooned to a one-month low of 101.29 on Monday after pulling back from a nearly two-decade high above 105 in mid-May, as U.S. inflation and other economic indicators showed signs of peaking amid the Federal Reserve's aggressive policy tightening.

A two-day boost has seen the index trading back towards 102.00.

"The greenback appears less sluggish than it has been in recent trading sessions, but its rebound attempts remain far from convincing," UniCredit analysts said in a research note.

Markets have priced half-point interest rate rises for the Fed's meetings this month and next, in line with what policymakers have been signalling, but the outlook beyond that is murky.

A monthly U.S. jobs report due on Friday may offer new clues.

The dollar rose 0.4% to 129.395 yen, having earlier touched 129.54, its highest level since May 17, as rising U.S. Treasury yields lifted the pair.

"Yield differentials between the US and Japan are still discouraging any tentative attempts to drag the pair towards 125," UniCredit added.

Benchmark 10-year Treasury yields are higher by 2.5 basis points at 2.8694%, having touched 2.888% earlier, the highest since May 19.

Elsewhere, the U.S. dollar was little changed against its Canadian counterpart ahead of the Bank of Canada's rate-setting meeting at 1400 GMT, where a 50-basis-point increase is widely expected.

The Aussie dollar strengthened 0.1% to $0.7185, and the Kiwi dollar fell 0.1% to $0.65065.

Sterling was flat against the dollar at $1.2605, after the pound's first positive month of year, with a small 0.2% rise snapping the previous four months of losses.

In cryptocurrencies, bitcoin slipped 0.9% to $31,467. Smaller coin, ether, was down 0.6% at $1,928.

(Reporting by Samuel Indyk in London Additional reporting by Kevin Buckland in Tokyo Editing by Helen Popper)