(Updates at 0850 GMT)

By Alun John and Anna Pruchnicka

LONDON, April 11 (Reuters) - The dollar was around its

highest since November against a basket of peers on Thursday,

after hotter-than-expected U.S. inflation data a day earlier

squashed expectations of an interest rate cut in June, leaving

the yen at a 34-year low.

Investor focus will now be on U.S. producer price data and

the European Central Bank's policy meeting later in the day.

The euro was flat at $1.0748, following

Wednesday's 1% fall on the U.S. data. The pound was up

0.18% at $1.2561 after a 1.1% fall a day earlier.

Any change in ECB rates would come as a major surprise to

markets, but the focus is on what president Christine Lagarde

says about the pace of cuts, after multiple hints from policy

markers in recent weeks, some quite explicit, that the central

bank will start cuts at its June meeting.

The outlook for the ECB and for other central banks has been

complicated by the U.S. inflation print which caused markets to

push back significantly their expectations of rate cuts from the

Federal Reserve, said Simon Harvey, head of FX analysis at Monex

Europe.

"The ECB will likely try to be as non-committal as possible

about their path after June at today's meeting," he said, adding

that the economic situation in Europe meant the central bank

would have to cut more sharply than its U.S. counterpart in the

coming months, which would send the euro lower.

The yen was at 153.26 per dollar, flat on the day,

but at its weakest since 1990 again after a bruising Wednesday

which saw the dollar climb nearly 1% on the Japanese currency.

That left the dollar index little changed on Thursday

at 105.16, having hit its highest since November in early trade.

Markets are now pricing in a 17% chance of the Fed cutting

rates in June, compared with 50% before the CPI data, according

to CME FedWatch tool, with September turning out to be the next

starting point for rate cuts.

Traders are also pricing in 43 basis points of cuts this

year, much lower than the 75 basis points of easing projected by

the U.S. central bank. At the start of the year, traders had

priced in over 150 bps of cuts in 2024.

U.S. producer price inflation data later today could shape

that picture further, as it will give additional information

about what to expect from personal consumption inflation data,

due later in the month, the Fed's preferred gauge of inflation.

The Canadian dollar hit its weakest since November at C$

1.3702 per U.S. dollar on Wednesday, on the CPI data and after

the Bank of Canada left rates steady but said a June cut was

possible.

YEN WATCH

The yen's slide to a 34-year low of 153.24 per U.S. dollar

on Wednesday brought intervention fears back as authorities in

Tokyo reiterated they would not rule out any steps to deal with

excessive swings.

Japan intervened in the currency market three times in 2022

as the yen slid toward what was then a 32-year low of 152 to the

dollar.

"These warnings from Tokyo will quickly start to sound

hollow and hence for credibility purposes alone, we maintain

that intervention looks imminent," said MUFG analysts in a note.

"It may require one further sharp jump toward 155.00 (for

dollar/yen) to justify it more clearly given the fact that the

moves to date certainly are more modest than in 2022 when

intervention took place."

The yen is down nearly 8% against the dollar this year, with

the currency rooted near 151-per-dollar levels since the Bank of

Japan last month ended eight years of negative interest rates.

Low Japanese rates have made the yen the funding currency of

choice for carry trades for years, in which traders typically

borrow a low-yielding currency to then sell and invest the

proceeds in assets denominated in a higher-yielding one.

Bank of Japan Governor Kazuo Ueda said on Wednesday the

central bank would not directly respond to currency moves in

setting monetary policy, brushing aside market speculation that

the yen's sharp falls could force it to raise interest rates.