* Pound drops by full cent after dovish BoE releases
* Only one vote for UK rate rise, inflation outlook softer
* Dollar flat against basket of currencies
By Patrick Graham
LONDON, Aug 6 (Reuters) - A less hawkish message than expected on Bank of England interest rates dominated major currency markets on Thursday, sending sterling a full cent lower, while the Swiss franc hit a five-month low as consumer morale dropped.
After a mixed bag of signals from the U.S. economy this week, the dollar was back in the middle of the past month's range, having failed for a third time to break below $1.08 per euro and edging just 0.1 percent higher on the day to $1.0897.
In a week dominated by a ramping up of bets on rate rises by the U.S. Federal Reserve and the Bank of England, just one of the nine officials on the BoE's policy committee voted for higher rates. There had been strong speculation of a bigger split.
The pound sank by 0.8 percent in response, to $1.5486 and 70.34 pence per euro respectively.
"We wouldn't be surprised to see GBP lower still over the course of the day," said Josh O'Byrne, a strategist with Citi in London.
In the minutes of its meeting, the BoE also pointed to the impact of sterling on inflation, referencing a wider theme: it is still not clear to many how, seven years after the 2008 financial crisis, central banks can raise rates when commodity prices are falling and headline inflation is near zero.
The Swiss franc, which traders speculate is being prodded lower by central bank intervention, hit its lowest since March 10 against the euro after a survey showed consumer sentiment fell in July to its lowest since autumn 2011.
The franc traded at 1.0713 francs per euro.
The New Zealand dollar NZD= had been the biggest mover in early European deals, recovering half a percent from a six-year low in otherwise mostly cautious trade.
The Aussie dollar was down 0.4 percent after a batch of poor unemployment data. AUD=
Those currencies, and others closely linked to global commodities prices, have sunk in the past month on the prospect of a first hike in U.S. rates that is expected to hammer emerging economies like China which are big buyers of metals and energy.
The dollar has attacked $1.08 per euro three times since mid-March and conviction that it will head past parity with the single currency this year or next has waned.
"The market is still reluctant to predict an aggressive tightening cycle by the Fed next year and that is because of inflation," said Esther Reichelt, a strategist with Commerzbank (XETRA:CBKG) in Frankfurt.
"At the moment the pricing is for one hike this year and three next - that is simply not enough for the dollar to go higher."