* Euro
* Euro brushes off higher-than-expected euro zone CPI data
* U.S. core consumer prices contained
(Updates prices, adds quote, U.S. data, changes byline, dateline; previous LONDON)
By Gertrude Chavez-Dreyfuss
NEW YORK, April 15 (Reuters) - The euro slid on Friday after Moody's cut Ireland's rating to just above 'junk' status, keeping the currency's debt problems in focus, though it remained underpinned by expectations for further interest rate rises.
Also helping limit losses especially against the U.S. dollar was a widely-held view U.S. interest rates will stay low for some time. Several top Federal Reserve officials have sounded relaxed about inflation and data on Friday supported that. For Fed comments, click on [ID:nN14167673].
Data showed U.S. core consumer prices for March were contained, suggesting the Fed was still a long way away from tightening monetary policy. The headline annual inflation rose due to the spike in gasoline prices, but analysts considered that rise temporary. See [ID:nOAT004787].
In contrast, investors are pricing in the chances of two
more European Central Bank rate increases before the end of
this year after the ECB raised rates by 25 basis points last
week
"The euro is in the middle of a tug-of-war between rate expectations and sovereign debt concerns. Right now, the euro pulled back a little bit because of the Ireland downgrade and concerns about the Greek debt restructuring." said Brian Kim, currency strategist at UBS in New York.
"But we're still trading near $1.45. So in the end, it's still rate expectations that will dictate direction and will keep the euro supported."
In addition, euro zone inflation numbers surprised on the upside, backing views that the ECB will continue to raise rates in coming months. [ID:nBRLFFE7CY]
In early new York trading, the euro fell 0.4 percent on the
day to $1.4427
There were reportedly Asian central banks had bids at $1.4415/20 and then at $1.4385/90, which is the 200-hour moving average and a key pivot.
The euro's losses gathered pace after Moody's cut Ireland's sovereign rating by two notches to Baa3 and left the outlook negative, citing an expected deterioration in the Irish government's financial strength and the country's weaker economic growth outlook. [ID:nLDE73E0DU]
Market players said the euro could find the going tough above $1.45 given concern about sovereign debt problems, which escalated this week as concerns about a possible Greek restructuring intensified. [ID:nLDE73D0XQ]
Still some asset managers are prefer to focus less on the region;s fiscal debt problems.
Japan's Kokusai Asset Management said it plans to increase the weighting of euro-denominated bonds in its $33 billion bond fund, the world's second largest, due to a solid outlook for euro zone economies. [ID:nL3E7FF0VV]
The dollar, meanwhile, was down 0.5 percent at 83.12 yen
Dollar losses accelerated after the U.S. inflation data.
"The data is solidly risk appetite-friendly and will only add to the recent tendency to defer the first Fed tightening well into 2012. For the moment, it gives the Fed doves additional staying power not to mention power at the FOMC table," said Alan Ruskin, global head of G10 currency strategy at Deutsche Bank in New York. (Additional reporting by Anirban Nag in London)