FOREX-Dollar rallies to multiyear peaks vs euro, yen as cenbank moves eyed

* Euro falls below $1.07 for first time in nearly 12 years

* Dollar hits nearly 8-year peak against yen

* Expectations of mid-year Fed rate hike support dollar

* ECB QE program sends European yields, euro lower

* Greek concerns begin to return for euro (Recasts; adds comments, updates prices)

By Sam Forgione

NEW YORK, March 10 (Reuters) - The U.S. dollar hit a near 12-year peak against the euro and touched its highest level against the Japanese yen in nearly eight years on Tuesday, buoyed by the European Central Bank's bond-buying program as well as expectations for a mid-year Federal Reserve rate hike.

The dollar index, which measures the greenback against a basket of major currencies, hit its highest since September 2003, while the euro fell as low as $1.06925, a level last reached in April 2003. The euro also hit 129.480 yen , its lowest since August 2013.

"The U.S. numbers seem to be supporting the Fed raising rates in 2015," said Douglas Borthwick, managing director at Chapdelaine Foreign Exchange in New York, referring to recent U.S. economic data. He said last Friday's strong U.S. jobs report for February was the "nail in the coffin" for the Fed hiking this year.

The launch of the European Central Bank's quantitative easing operation on Monday drove European yields lower and weakened the euro. A research note from Deutsche Bank (Xetra: 514000 - news) on Tuesday forecast that the euro would hit parity with the dollar by year-end, 90 U.S. cents by 2016 and 85 cents by 2017.

Against the yen, the dollar hit 122.040 yen - its strongest level since July 2007. The greenback also hit parity with the Swiss franc for the first time since the Swiss National Bank (NYSE: NBHC - news) scrapped a 1.20 francs per euro cap on Jan. 15.

In emerging markets, the dollar hit 15.6452 pesos, its highest against the Mexican peso since at least 1989, and its highest in nearly 11 years against the Brazilian real at 3.1722 reais.

"What looked good with the Fed at zero rates doesn't look good when the Fed starts tightening," said Win Thin, currency strategist at Brown Brothers Harriman in New York, in reference to higher-risk emerging market currencies.

Renewed concerns about Greece's finances also weighed on the euro. The dollar briefly pared gains after Bloomberg reported on Twitter (Xetra: A1W6XZ - news) that White House Council of Economic Advisers Chairman Jason Furman said the surging dollar is a headwind for U.S. growth.

The euro was last trading down 1.42 percent against the dollar at $1.0700. The dollar was mostly flat against the yen at 121.135 yen and last up 1.32 percent against the Swiss franc at 0.99895 franc.

The dollar index was last up 1.03 percent at 98.589. (Reporting by Sam Forgione; Additional reporting by Anirban Nag in London; editing by Meredith Mazzilli, G Crosse and Richard Chang)