Dollar slides after tamer-than-expected U.S. inflation data

© Reuters. FILE PHOTO: U.S. one hundred dollar notes are seen in this picture illustration taken in Seoul February 7, 2011. REUTERS/Lee Jae-Won/File Photo

By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - The dollar fell on Tuesday after data showed a less-than-expected rise in U.S. inflation last month, creating uncertainty as to the timing of the Federal Reserve's tapering of asset purchases.

Several Fed officials have suggested that the U.S. central bank could reduce buying debt securities by the end of the year.

The Labor Department said on Tuesday its Consumer Price Index excluding the volatile food and energy components edged up just 0.1% last month. That was the smallest gain since February and followed a 0.3% rise in July. The so-called core CPI increased 4.0% on a year-on-year basis after advancing 4.3% in July.

"We didn't get a really high number on CPI, the fact that they came in just below expectations gives the Fed the chance to punt any taper implementation announcement from September to November," said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

"The inflation numbers confirmed that the Fed can push it off a little bit more, 'cause there were worries if inflation numbers came in really hot then the Fed's hand might be forced to move sooner rather than later, in spite of recent employment numbers being weak," he added.

The dollar index fell 0.2% to 92.432, following the data, further retreating from a more than two-week high hit on Monday.

The euro rose 0.2% against the dollar to $1.1827. Against the Swiss franc, the dollar dropped 0.3% to 0.92 francs.

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Currency bid prices at 8:47AM (1247 GMT)

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Dollar index 92.3980 92.6260 -0.23% 2.686% +92.6650 +92.3670

Euro/Dollar $1.1835 $1.1810 +0.21% -3.13% +$1.1841 +$1.1801

Dollar/Yen 109.9650 110.0050 -0.02% +6.44% +110.1550 +109.9400

Euro/Yen 130.14 129.91 +0.18% +2.54% +130.1900 +129.8600

Dollar/Swiss 0.9196 0.9224 -0.25% +4.00% +0.9228 +0.9193

Sterling/Dollar $1.3892 $1.3841 +0.38% +1.69% +$1.3901 +$1.3831

Dollar/Canadian 1.2615 1.2642 -0.21% -0.93% +1.2664 +1.2602

Aussie/Dollar $0.7355 $0.7373 -0.28% -4.43% +$0.7373 +$0.7324

Euro/Swiss 1.0882 1.0888 -0.06% +0.69% +1.0904 +1.0882

Euro/Sterling 0.8517 0.8530 -0.15% -4.70% +0.8539 +0.8511

NZ $0.7137 $0.7118 +0.26% -0.62% +$0.7151 +$0.7103

Dollar/Dollar

Dollar/Norway 8.5870 8.6480 -0.68% +0.03% +8.6490 +8.5775

Euro/Norway 10.1622 10.2062 -0.43% -2.91% +10.2210 +10.1527

Dollar/Sweden 8.5591 8.6076 -0.24% +4.43% +8.6145 +8.5580

Euro/Sweden 10.1316 10.1560 -0.24% +0.55% +10.1740 +10.1300