The Euro gained in Wednesday’s overnight trading session as the investors were hoping for an interest rate hike by European Central Bank. The US dollar exchange rate remained under pressure in reaction however reached its six month highest against the Japanese currency.

The dollar index DXY which measures the US dollar movement against its major rival currencies declined to 75.631 on Wednesday’s overnight trading session as compared to 75.883 on Tuesday’s North American trading session.

The Euro exchange rate advanced to1.4319 against the US dollar on Wednesday’s overnight trading session however later settled to 1.4307 as compared to 1.4227 on Tuesday’s late trading hours. The single currency gained on positive region’s economic data as German’s factory orders increased by 2.4 percent for the month of February which surpassed wide expectations.

The traders remained optimistic about the euro on the news that European Central Bank could increase its interest rate to 1.25 percent from 1 percent despite Portugal’s sovereign debt crisis.

Senior currency strategist Elsa Lignos from RBC Capital Markets commented, “With long euro positioning looking increasingly stretched heading into the ECB’s meeting tomorrow, confirmation of the expected 25 basis-point hike may prompt some selling of the fact.”

The US dollar gained to 85.11 versus the Japanese Yen on Wednesday’s Asian trading session as compared to 84.83 on late Tuesday. The pair USD/YEN reached its high of 85.52 in overnight market. Analysts are expecting US dollar to further gain against the Japanese unit in coming weeks. Resistance for the pair USD/YEN is expected around 87.75 according to most currency strategists.

The British Pound also surged versus the US dollar to 1.6298 on Wednesday as compared to 1.6283 on Tuesday.