By John McCrank
NEW YORK (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. Federal Reserve.
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 years.
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 Oanda.
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 it's 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 greenback.
The greenback fell 1.38% versus the Japanese yen to 133.2 yen.
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 $24,000.
(Reporting by John McCrank in New York; Editing by Mark Heinrich and John Stonestreet)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
You’ve hit your limit of {{free_limit}} free articles this month.
Subscribe now for unlimited access.
Already subscribed? Log in
Subscribe to read the full story →
Quarterly Starter
₹900
3 Months
₹300/Month
Smart Essential
₹2,700
1 Year
₹225/Month
Super Saver
₹3,900
2 Years
₹162/Month
Renews automatically, cancel anytime
Here’s what’s included in our digital subscription plans
Access to Exclusive Premium Stories Online
Over 30 behind the paywall stories daily, handpicked by our editors for subscribers


Complimentary Access to The New York Times
News, Games, Cooking, Audio, Wirecutter & The Athletic
Business Standard Epaper
Digital replica of our daily newspaper — with options to read, save, and share


Curated Newsletters
Insights on markets, finance, politics, tech, and more delivered to your inbox
Market Analysis & Investment Insights
In-depth market analysis & insights with access to The Smart Investor


Archives
Repository of articles and publications dating back to 1997
Ad-free Reading
Uninterrupted reading experience with no advertisements


Seamless Access Across All Devices
Access Business Standard across devices — mobile, tablet, or PC, via web or app