The dollar surged on Wednesday to a fresh 10-1/2-month peak against rival currencies, boosted by increased expectations for a reduction in the US Federal Reserve's asset purchases by the end of the year and an interest rate hike, possibly in late 2022.The greenback also fared well despite an impasse in Washington over the US debt ceiling that threatened to plunge the government into a shutdown.The world's largest reserve currency, seen as a safe haven bet at times of market stress, has strengthened in recent days as investors instead focus on fears of a global slowdown, a rise in energy prices and higher US Treasury yields.Traders are also concerned the Fed will start to withdraw policy support just as global growth slows."The Fed last week got on the more hawkish side, projecting more rate increases…and sounding more worried about persistently high inflation," said Erik Nelson, macro strategist, at Wells Fargo Securities in New York."To me, that's what helping the dollar stay well-bid here."Nelson also sees a further 2 percent to 3 percent upside in the dollar index.The dollar index, which measures the US currency against a basket of six major currencies, rose for the fourth consecutive day, to 94.112, its highest since early November last year. It was last up 0.4 percent at 94.115.The greenback was also unfazed, even as US Senate Republicans on Tuesday blocked a bid by President Joe Biden's Democrats to head off a potentially crippling US credit default, with federal funding due to expire on Thursday and borrowing authority on around October 18."It's a sign perhaps of the confidence that people have in the US that even as the US government barrels toward a cliff like a car with a drunken driver who's being beaten up by his even more drunk passenger, the dollar can strengthen," said Marshall Gittler, head of investment research at BDSwiss, in a note.The euro was among the currencies to lose ground, falling to a nearly 11-month low of USD 1.1630. It last traded down 0.5 percent at USD 1.1631.The yen showed little reaction to the election of Fumio Kishida as leader of Japan's ruling Liberal Democratic Party that put him on course to become the country's next prime minister.The yen, the currency most sensitive to US yields as higher rates can attract flows from Japan, touched an 18-month low against a resurgent dollar. The dollar climbed to 111.68 yen, the highest since late March 2020. It was last little changed at 111.585 yen.Currency traders are watching closely for clues as to when governments and central banks worldwide will reverse massive emergency support launched to fight the pandemic last year.European Central Bank (ECB) President Christine Lagarde, Fed Chair Jerome Powell, Bank of England Governor Andrew Bailey and Bank of Japan Governor Haruhiko Kuroda are panelists at an ECB forum in Sintra, Portugal, at 1545 GMT.