May 10, 2018 / 3:31 PM / 4 months ago

FOREX-CPI miss keeps dollar in check, sterling falls

    * Dollar index holds below 2018 peak as CPI disappoints
    * Euro benefits as dollar rally stalls 
    * Bank of England leaves rates alone, cuts growth outlook

 (Adds market action, changes dateline, previous LONDON)
    By Richard Leong
    NEW YORK, May 10 (Reuters) - The U.S. dollar fell on
Thursday against a basket of currencies, holding below its 2018
peak, as a smaller-than-expected increase in consumer prices
reduced bets that inflation is accelerating, which could push
the Federal Reserve to hike interest rates faster.
    The British pound hit a four-month low versus the
greenback after the Bank of England left key borrowing costs
unchanged but reduced its growth and inflation outlook for 2018
and 2019.
    Weaker price growth among major economies has reduced
expectations that most central banks other than the Fed will
reduce their bond purchases or raise interest rates.
    The U.S. Consumer Price Index, the government's broadest
inflation gauge, increased 0.2 percent in April, while the CPI
rate that excludes volatile food and energy prices edged up 0.1
percent.
    Economists polled by Reuters had forecast the CPI likely
grew by 0.3 percent last month, and the core CPI gained 0.2
percent.
    "With the disappointment of the late CPI, it does knock the
wind out of the dollar for a bit," said Mazen Issa, senior FX
strategist at TD Securities in London.
    Lower U.S. Treasury yields added pressure on the greenback
which had rallied for over two weeks on traders exiting their
bearish bets on the dollar on signs of overseas growth, in
particular in Europe, cooling quicker than the United States.
    At 11:09 a.m. EDT (1519 GMT), the dollar index was
down  0.1 percent against a basket of six major currencies at
92.931 after hitting a 4-1/2-month high of 93.42 on Wednesday.
    Benchmark 10-year Treasury yield was down 2
basis points at 2.973 percent. 
    The British pound was down 0.4 percent at $1.3495
after falling to $1.3460, the lowest level since Jan. 11 after
the latest BOE statement.
========================================================
    Currency bid prices at 11:15AM (1515 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
                                              Session                                           
 Euro/Dollar      EUR=        $1.1886        $1.1850     +0.30%         +0.00%      +1.1946     +1.1844
 Dollar/Yen       JPY=        109.6100       109.7400    -0.12%         +0.00%      +110.0100   +109.3200
 Euro/Yen         EURJPY=     130.29         130.04      +0.19%         +0.00%      +130.7500   +130.0000
 Dollar/Swiss     CHF=        1.0035         1.0050      -0.15%         +0.00%      +1.0057     +0.9995
 Sterling/Dollar  GBP=        1.3491         1.3544      -0.39%         +0.00%      +1.3617     +1.3461
 Dollar/Canadian  CAD=        1.2793         1.2853      -0.47%         +0.00%      +1.2859     +1.2743
 Australian/Doll  AUD=        0.7506         0.7462      +0.59%         +0.00%      +0.7533     +0.7451
 ar                                                                                             
 Euro/Swiss       EURCHF=     1.1928         1.1914      +0.12%         +0.00%      +1.1949     +1.1900
 Euro/Sterling    EURGBP=     0.8808         0.8748      +0.69%         +0.00%      +0.8837     +0.8729
 NZ Dollar/Dolar  NZD=        0.6940         0.6984      -0.63%         +0.00%      +0.6985     +0.6904
 Dollar/Norway    NOK=        8.0131         8.0742      -0.76%         +0.00%      +8.0825     +7.9818
 Euro/Norway      EURNOK=     9.5260         9.5726      -0.49%         +0.00%      +9.5775     +9.5223
 Dollar/Sweden    SEK=        8.6692         8.7027      -0.09%         +0.00%      +8.7118     +8.6136
 Euro/Sweden      EURSEK=     10.3080        10.3170     -0.09%         +0.00%      +10.3275    +10.2710
         

    
 (Additional reporting by Tom Finn in London;
editing by Mark Heinrich and Jonathan Oatis)
  
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