(Updates prices, adds comments; changes byline, dateline, pvs
* Dollar hits highest vs loonie since Feb. '16
* Euro rises to just below 5-1/2-month high
* Dollar jumps about 1 pct to 2-week high vs yen
* Reuters report on potential ECB plans boosts euro
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Sam Forgione
NEW YORK, April 25 The U.S. dollar surged to its
highest level against its Canadian counterpart in more than a
year on Tuesday after the United States imposed duties on
Canadian softwood, while the dollar hit a two-week high against
the yen on greater risk appetite.
The greenback hit C$1.3615, its highest level
against the loonie since late Feb. 2016. U.S. Commerce Secretary
Wilbur Ross said Monday the United States will impose
preliminary anti-subsidy duties averaging 20 percent on imports
of the softwood lumber.
The move, which affects some $5.66 billion worth of imports
of the construction material, set a tense tone as the two
countries and Mexico prepare to renegotiate the 23-year-old
North American Free Trade Agreement.
"It reflects what is going to happen with the trade
relationships for the U.S. and its neighbor," said Sireen
Harajli, FX strategist at Mizuho in New York. "This is a
negative reflection on that trade relationship."
The dollar surged about 1 percent against the yen to a
two-week high of 110.84 yen as traders abandoned the
safe-haven currency on relief over centrist candidate Emmanuel
Macron's victory in the first round of Sunday's election in
Data showing a surge in new U.S. home sales to an
eight-month high last month also suggested underlying strength
in the economy despite an apparent sharp slowdown in growth in
the first quarter, boosting the dollar against the yen.
Analysts also said anticipation that U.S. President Donald
Trump's administration will make an announcement on tax reform
this week boosted the dollar against the yen.
"Between the France election and the prospects of corporate
tax cuts being proposed in the next few days, it’s clearly a
risk-on backdrop," said Thierry Albert Wizman, global interest
rates and currencies strategist at Macquarie Group Ltd in New
The euro hit $1.0932, just under Monday's 5-1/2-month
high of $1.0935. Three sources on and close to the European
Central Bank's Governing Council told Reuters that with the
threat of a run-off between two eurosceptic candidates in France
averted, and with the economy on its best run in years, many
rate setters see scope for sending a small signal in June
towards reducing monetary stimulus.
The prospect of reduced ECB monetary stimulus suggested
higher European interest rates and a higher euro, Harajli of
The dollar index, which measures the greenback
against a basket of six major rivals, was last down 0.3 percent
(Reporting by Sam Forgione; additional reporting by Jemima
Kelly in London; Editing by Nick Zieminski)