On an annual basis, consumer prices rose 4%, the smallest in more than two years, slowing from April's 4.9%.
That has crystallised traders' views that the Fed is unlikely to hike rates later on Wednesday.
S&P 500 futures and Nasdaq futures were both up 0.2%, setting Wall Street for further gains after U.S. stocks rallied to 14-month highs overnight.
That supported the euro , which was up 0.1% to $1.0850, hovering just below Tuesday's three-week high of $1.08235.
German two-year bond yields touched a fresh high since March ahead of Thursday's European Central Bank rates decision.
Persons:
Richard McGuire, Jim Reid, Stocks, Yoruk Bahceli, Stella Qiu, Jacqueline Wong, Sharon Singleton, Chizu
Organizations:
Sterling, U.S . Federal, U.S, CPI, Nasdaq, Rabobank, Deutsche Bank, Bank of, Thursday's European Central Bank, Brent, International Energy Agency, Tokyo's Nikkei, Thomson
Locations:
London, Asia