NEW YORK, Aug 10 (Reuters) - The dollar fell more than 1
percent on Wednesday following a cooler-than-expected inflation
report for July that raised expectations of a less aggressive
rate hike cycle than previously anticipated from the U.S.
U.S. consumer prices did not rise in July as the cost of
gasoline plunged, delivering the first notable sign of relief
for Americans who have watched inflation climb over the past two
Economists polled by Reuters had forecast a 0.2% rise on the
heels of a roughly 20% drop in the cost of gasoline.
The dollar index, which measures the currency's value
against a basket of currencies, was down 1.128% at 105.15 at
9:00 a.m. Eastern time (1300 GMT).
"This is good news for FX traders, as it was a pretty clear
reaction and you will probably see that there still should be
some follow-through," said Edward Moya, senior market analyst at
The Fed has indicated that several monthly declines in CPI
growth will be needed before it lets up on the increasingly
aggressive monetary policy tightening it has delivered to tame
inflation currently running at four-decade highs.
"They will be debating whether its a half-point increase,
or 75 (basis points), but I think the risk of much more
aggressive tightening is now off the table," said Moya.
The euro climbed 1.1% to $1.0325, sterling
gained 1.17% to $1.2216, and the dollar also lost 1.12%
on the Swiss franc, which traded at 0.9428 per
The greenback fell 1.38% versus the Japanese yen to 133.2
A quick reading on policymakers' reaction may come from Fed
officials Charles Evans and Neel Kashkari, who were due to make
speeches at 1500 GMT and 1800 GMT, though they will have another
set of price data in August before September's policy meeting.
The Australian dollar, seen as a barometer of risk,
was up 1.32% at $0.7054.
Bitcoin, rattled by a drumbeat of cryptocurrency
fund wipeouts and thefts over recent months, was up 3.61% at
(Reporting by John McCrank in New York; Editing by Mark
Heinrich and John Stonestreet)