(Updates prices at 1258 GMT and adds details throughout)
The dollar sank to a new two-month low on Wednesday after data showed the rise in U.S. consumer prices eased in June, suggesting that the Federal Reserve may have to raise interest rates just one more time this year.
The dollar index dropped as low as 101.04, the lowest in two months, after the data, and was last down 0.4% at 101.27 =USD .
The greenback also hit its lowest against the Swiss franc CHF=EBS since early 2015 after the inflation report. It was last down 0.6% at 0.8750 francs, having fallen to a session low of 0.8735 earlier, its weakest since the Swiss National Bank removed the peg from the Swiss currency in January 2015.
Core U.S. consumer prices rose just 0.2% in June, compared with forecasts for a gain of 0.3%. On an annual basis, U.S. CPI advanced 4.8%, lower than market expectations for a 5% increase. That was also the smallest annual increase in more than two years.
U.S. rate futures still show traders overwhelmingly expect the policy rate to rise a quarter point, to a 5.25%-5.5% range, at the Fed's July 25-26 meeting, but now see about a 25% chance of another rate hike before year's end, down from about 35% before the report.
"The Fed may have talked itself into a corner with a July 26th rate hike. The data don't confirm that they need to actually hike," said Brian Jacobsen, chief economist, at Annex Wealth Management, in Menomonee Falls, Wisconsin.
"Since they're stubborn, they'll probably do it anyways. Thankfully the market has been expecting that hike. The end is near for hikes."
======================================================== Currency bid prices at 8:58AM (1258 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Dollar index =USD 101.1900 101.6000 -0.40% -2.222% +101.6100 +101.0400 Euro/Dollar EUR=EBS $1.1059 $1.1010 +0.45% +3.21% +$1.1072 +$1.1008 Dollar/Yen JPY=EBS 139.2500 140.3800 -0.80% +6.21% +140.3400 +138.7700 Euro/Yen EURJPY= 154.01 154.49 -0.31% +9.77% +154.5200 +153.5200 Dollar/Swiss CHF=EBS 0.8745 0.8794 -0.51% -5.38% +0.8793 +0.8735 Sterling/Dollar GBP=D3 $1.2951 $1.2931 +0.12% +7.05% +$1.2975 +$1.2905 Dollar/Canadian CAD=D3 1.3219 1.3230 -0.08% -2.43% +1.3233 +1.3197 Aussie/Dollar AUD=D3 $0.6733 $0.6687 +0.67% -1.25% +$0.6751 +$0.6683 Euro/Swiss EURCHF= 0.9672 0.9679 -0.07% -2.25% +0.9695 +0.9663 Euro/Sterling EURGBP= 0.8537 0.8511 +0.31% -3.47% +0.8542 +0.8506 NZ NZD=D3 $0.6231 $0.6198 +0.42% -1.98% +$0.6246 +$0.6183 Dollar/DollarDollar/Norway NOK=D3 10.2140 10.3530 -1.24% +4.19% +10.3490 +10.1940 Euro/Norway EURNOK= 11.2984 11.3868 -0.78% +7.67% +11.4120 +11.2620 Dollar/Sweden SEK= 10.5439 10.6608 -0.54% +1.30% +10.6696 +10.5152 Euro/Sweden EURSEK= 11.6613 11.7241 -0.54% +4.59% +11.7573 +11.6390 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates https://tmsnrt.rs/2RBWI5E^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
