(Updates prices, adds comments; changes byline, dateline, pvs
* Euro retreats from 5-1/2-month high
* Dollar hits nearly 4-week high vs yen
* Eyes on Trump announcement on tax reform
* Aussie, kiwi big losers after Australian inflation data
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Sam Forgione
NEW YORK, April 26 The U.S. dollar strengthened
broadly on Wednesday, with the currency hitting nearly four-week
highs against the yen, on anticipation that a promised White
House announcement on tax reform could boost the greenback.
The dollar jumped to 111.73 yen, its highest level so
far this month, while the euro was last down 0.5 percent against
the greenback at $1.0874 after touching a 5-1/2-month
high of $1.0950 on Tuesday ahead of the tax plan announcement.
The euro rose to match that same high against the dollar in
early trading on Wednesday.
U.S. Treasury Secretary Steve Mnuchin said the plan for "the
biggest tax cut" in U.S. history due to be released later on
Wednesday would cut the business tax rate to 15 percent,
including for small businesses.
Analysts said traders were also taking profit on bearish
"short" bets against the dollar and bullish "long" bets on the
euro after the dollar had plunged against the euro in recent
days following centrist Emmanuel Macron's victory against
anti-euro nationalist Marine Le Pen in the first round of
France's presidential elections.
Gains for the euro this week have also been spurred by
expectations of a change in the direction of European Central
Bank policy in coming months. The ECB is set to meet on
"The dollar is seeing some strength across the board today
on excitement and expectations for the Trump tax plan," said
Douglas Borthwick, managing director at Chapdelaine Foreign
Exchange in New York.
Borthwick said, however, that traders' skepticism that any
announced plan would pass through the U.S. House and Senate
exactly as proposed capped the dollar's gains.
The Australian dollar sank about 1 percent against the
greenback to a more than three-month low of $0.7462
after soft Australian inflation numbers.
Key measures of core inflation stayed stubbornly short of
the Reserve Bank of Australia's (RBA) 2 to 3 percent target
band, implying there was scant pressure for a hike in interest
rates anytime soon.
The data also hurt the Aussie since it increased the chance
that the RBA could lower interest rates again, said Richard
Scalone, co-head of foreign exchange at TJM Brokerage in
The New Zealand dollar also tumbled about 1 percent
against the U.S. dollar, hitting its lowest level of the year at
The dollar index, which measures the greenback against a
basket of six major rivals, was last up 0.4 percent at 99.171
(Reporting by Sam Forgione; Additional reporting by Patrick
Graham in London; Editing by Meredith Mazzilli)