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NEW YORK  - The dollar surged to a 20-year high against a basket of currencies and the euro broke below parity against the greenback after data on Wednesday showed U.S. consumer price inflation surged to a 40-1/2-year high in June.

The consumer price index increased 1.3% last month as gasoline and food costs remained elevated, more than the 1.1% expected by economists polled by Reuters.

"This morning's number is staggeringly high. It's higher than expected and shows that inflation is going quickly in the wrong direction," said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance.

The euro plunged to $0.9998 against the greenback, breaking below the $1 level for the first time since Dec. 2002, before bouncing back to last trade at $1.0024.

The dollar index reached 108.59, the highest since Oct. 2002, from around 107.9 before the data released.

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Currency bid prices at 8:59AM (1259 GMT)

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

Previous Change

Session

Dollar index 108.3400 108.2000 +0.14% 13.252% +108.5900 +107.7800

Euro/Dollar $1.0024 $1.0036 -0.11% -11.82% +$1.0109 +$0.9998

Dollar/Yen 137.6000 136.8750 +0.53% +19.53% +137.7100 +136.6900

Euro/Yen 137.93 137.37 +0.41% +5.84% +138.1700 +137.1300

Dollar/Swiss 0.9799 0.9821 -0.19% +7.46% +0.9829 +0.9752

Sterling/Dollar $1.1858 $1.1885 -0.21% -12.31% +$1.1942 +$1.1828

Dollar/Canadian 1.3022 1.3021 +0.03% +3.01% +1.3060 +1.2979

Aussie/Dollar $0.6749 $0.6757 -0.13% -7.17% +$0.6803 +$0.6726

Euro/Swiss 0.9823 0.9854 -0.31% -5.27% +0.9864 +0.9807

Euro/Sterling 0.8452 0.8438 +0.17% +0.62% +0.8455 +0.8404

NZ $0.6101 $0.6127 -0.44% -10.88% +$0.6158 +$0.6081

Dollar/Dollar

Dollar/Norway 10.2480 10.2520 +0.05% +16.43% +10.2815 +10.1740

Euro/Norway 10.2780 10.2876 -0.09% +2.65% +10.3055 +10.2413

Dollar/Sweden 10.5852 10.5637 +0.00% +17.38% +10.6232 +10.5078

Euro/Sweden 10.6113 10.6110 +0.00% +3.69% +10.6326 +10.5979