(Update after inflation data in the US. Change author and origin -previous HONG KONG)
By John McCrank
NEW YORK, Aug 10 (Reuters) – The dollar fell more than 1% on Wednesday, after a cooler-than-expected U.S. inflation report for July raised expectations of a less aggressive rate-hike cycle from anticipated by the Federal Reserve.
* Consumer prices did not rise in July as the cost of gasoline plummeted, providing the first notable sign of relief for Americans who have seen inflation rise in the past two years. Economists polled by Reuters had forecast a rise of 0.2% after a drop of around 20% in the cost of gasoline.
* The dollar index, which measures the currency’s value against a basket of currency pairs, fell 1.128% to 105.15 by 1300 GMT.
* The Fed has indicated that it will take several monthly declines in CPI growth before it ceases the increasingly aggressive monetary policy tightening it has pursued to control inflation, which is currently at four-decade highs.
* “They will be debating whether it’s a half point hike or 75 (basis points), but I think the risk of much more aggressive tightening is now off the table,” said Edward Moya, senior market analyst at Oanda.
* The euro was up 1.1% at $1.0325, the British pound was up 1.17% at $1.2216 and the greenback was also down 1.12% against the Swiss franc, which was trading at 0. .9428 per dollar.
* The dollar, meanwhile, rose 1.38% against the Japanese yen to 133.2 yen.
* A quick read on the monetary authorities’ reaction may come from Fed officials Charles Evans and Neel Kashkari, who were due to make speeches later in the day, though they will have another set of price data in August before the meeting. September.
(Reporting by ohn McCrank in New York, Edited in Spanish by Manuel Farías)