Dollar ticks down, euro up ahead of U.S. CPI report

A picture illustration of U.S. dollar, Swiss Franc, British pound and Euro bank notes, taken in Warsaw January 26, 2011. REUTERS/Kacper Pempel

NEW YORK, Feb 9 (Reuters) – The dollar slid further on Wednesday and the euro extended gains following a hawkish shift from the European Central Bank last week and ahead of key data on U.S. consumer prices due on Thursday.

The CPI print may offer new indications about the pace of the Federal Reserve’s monetary tightening, and investors are bracing for higher-than expected numbers that would signal more aggressive interest rate hikes.

That readout is expected to show a 0.5% month-over-month increase in January, and 7.3% for the year, according to economists polled by Reuters.

Investors have been revising their forecasts for ECB rate hikes after the bank caught them off guard…