LONDON (Reuters) - The euro bounced against the dollar on Thursday after data showed a key measure of U.S. inflation rose by less than expected in October, tempering expectations for the Federal Reserve to aggressively raise interest rates.
U.S. government data showed core consumer inflation, which excludes volatile food and energy costs, rose at an annual rate of 6.3% in October compared with forecasts for an increase of 6.5%.
The euro rose as much as 0.72% to a high of $1.0085, compared with $0.9955 prior to the data. The dollar fell by as much as 1.6% against the yen to 144.05 from 146.11 previously.
German 10-year bond yields dropped, falling 12 basis points on the day to 2.06% compared with 2.162% before the data. European stocks rallied, with the STOXX 600 rising 2% to its highest since Sept. 13, compared with a 0.3% gain prior to the numbers.