LONDON (AFP) - The dollar rose against the euro and the yen on Wednesday as dealers weighed up prospects for interest rate rises in the United States and the eurozone, dealers said. The European single currency fell to 1.5480 dollars in morning London trade from 1.5508 in New York late on Tuesday. Against the Japanese currency, the dollar advanced to 108.36 yen from 107.93. Later Wednesday, the market will digest quarterly results from US investment bank Morgan Stanley after better than expected earnings at Goldman Sachs. "The dollar is moderately higher, having pared back the losses made yesterday following the press reports which down-played the prospect on a near-term rate hike by the Fed," said ABN Amro analyst Melinda Smith. The Wall Street Journal had reported that the US Federal Reserve was "almost certain" to leave interest rates unchanged when it meets next week. The dollar had also sunk against the euro on Tuesday amid growing inflation concerns on both sides of the Atlantic. Despite a sharp rise in US wholesale prices, traders were unsure whether the Fed will take action to curb inflation given sluggish growth in the world's largest economy. "Players are divided over whether the Federal Reserve will raise rates in the near term," Takuma Kurosawa, a senior dealer at HSBC, told Dow Jones Newswires. US wholesale prices jumped 1.4 percent in May, the most in six months, but core inflation excluding energy and food remained tame. US housing starts fell 3.3 percent in May as industrial production declined a larger-than-expected 0.2 percent compared with April, suggesting the economy is still being pressured by the fallout from the mortgage default crisis. The dollar's fall was capped by remarks from central bank officials downplaying expectations for higher borrowing rates in the eurozone and Britain as economic conditions sour, dealers said. British inflation hit a 16-year high of 3.3 percent in May but Bank of England governor Mervyn King suggested that the spike would not result in aggressive rate rises. ECB board member Lorenzo Bini Smaghi meanwhile indicated that a 25-basis point rate hike could be enough to bring inflation down to the bank's inflation target of 2.0 percent in the eurozone, dealers noted. In London, the euro changed hands at 1.5480 dollars against 1.5508 late on Tuesday, at 167.71 yen (167.52), 0.7946 pounds (0.7924) and 1.6189 Swiss francs (1.6159). The dollar stood at 108.36 yen (107.93) and 1.0456 Swiss francs (1.0416). The pound was at 1.9495 dollars (1.9566). On the London Bullion Market, the price of gold rose to 884.38 dollars per ounce from $881.50 late on Tuesday.