* Headline CPI unexpectedly falls, other price measures also weak
* Revives rate cut talk, RBA's May meeting in focus
* Aussie dlr tumbles
By Wayne Cole
SYDNEY, April 27 (Reuters) - Australian consumer prices fell unexpectedly last quarter while key measures of core inflation slowed to the lowest on record, a disturbingly weak result that revived pressure for another cut in interest rates.
The local dollar dived a full U.S. cent to $0.7672 AUD=D4 as the market revised up the probability of a rate cut at the Reserve Bank of Australia's (RBA) May 3 meeting to 48 percent.
It had been down at just 12 percent before the Australian Bureau of Statistics reported its headline consumer price index (CPI) fell 0.2 percent in the first quarter, confounding forecasts of a 0.3 percent increase.
Annual inflation slowed to 1.3 percent, from 1.7 percent, as tumbling international oil prices weighed on prices.
Key measures of underlying inflation rose by just 0.15 percent on average in the first quarter, easily the lowest outcome since the series first began in 2002.
The annual pace slowed to 1.6 percent, again the lowest on record and well under the RBA's long-term target band of 2 to 3 percent.
The result would be a shock to the central bank which had projected core inflation would bottom around 2 percent.
The central bank has said low inflation would allow room for a further cut in rates, though it also sounded unconvinced ever-easier policy was the right prescription for the economy.
Dragging inflation lower in the quarter was a 10 percent dive in petrol and an 11 percent drop in fruit prices, while the cost of international holiday travel and accommodation also declined.
That more than offset price rises in education, medical and hospital services and pharmaceutical products, many of which are set by government dictat rather than market forces.