FOREX-Dollar jumps as consumer prices rise more than expected

Updated in early New York morning time

NEW YORK, Feb 12 (Reuters) - The U.S. dollar jumped on Wednesday after data showed that consumer prices rose more than economists expected in January, raising the likelihood that the Federal Reserve will hold interest rates higher for longer as it battles to bring down price pressures.

The headline consumer price index rose by 0.5% in January, while the core index rose by 0.4%. Both were expected to rise by 0.3%.

That puts headline consumer price gains at 3.0% for the year, above expectations for a 2.9% increase, while core prices rose at an annual pace of 3.3%, above expectations for a 3.1% rise.

The dollar index =USD was last up 0.52% on the day at 108.49, while the euro EUR=EBS fell 0.42% to $1.0317. Against the Japanese yen JPY=EBS, the dollar strengthened 1.19% to 154.3 yen.

Interest rate futures traders are now pricing in only 26 basis points of cuts by December, down from around 37 basis points before the data, implying only one 25 basis point cut for the year.