A look at the day ahead in European and global markets from Tom Westbrook

Discomfort is rising in emerging markets, notably in Asia.

As the dollar rips higher, sterling and the euro are perched perilously above supports at $1.24 and $1.06, respectively, and the yen is hitting new three-decade lows daily.

The main driver is U.S. economic strength and the retreat in rate cut expectations, which beat back even further after a hawkish shift in tone from Federal Reserve Chair Jerome Powell.

But China has given the dollar an extra boost again this week with a signal, via a weakening of its yuan trading band, that it could tolerate its currency falling a little bit. [CNY/]

That's put the blowtorch on neighbours, which tend to follow the yuan's lead, and makes it a lot harder for smaller central banks to cut rates since that only adds to FX pressure.

It's a conundrum for swathes of Asia where inflation never really got that hot and policymakers were readying cuts to support spending and economic growth.

Indonesia's central bank, which has a mandate for currency stability, stepped in to steady the sliding rupiah on Tuesday and analysts are mulling whether it may be forced to hike rates as soon as next week.

The rupiah on Wednesday hit its lowest since the peak of pandemic pandemonium in markets in March 2020.

India's rupee hit a record low on Tuesday. Vietnam's dong is at record lows and free-falling.

Malaysia, Japan and South Korea have warned they stand ready to intervene - so far keeping those currencies from some landmark chart levels.

Outside Japan, the prospect of rate cuts in Asia this year is evaporating. Inside Japan, rises in yields have not kept pace with the selling in the U.S. Treasury market, widening the 10-year rates gap to more than 380 basis points.

Later in the day, British inflation is due and base effects are seen encouraging a decline in the pace of core and headline price rises. Final euro zone inflation figures are also due, though they will likely track the preliminary data.

An Israeli government source said a war cabinet session scheduled for Tuesday had been put off until Wednesday, likely pushing back any response to a weekend attack from Iran.

Key developments that could influence markets on Wednesday:

British CPI

Fed releases Beige Book of economic conditions

U.S. earnings: Las Vegas Sands, Abbott Laboratories

(Editing by Jacqueline Wong)