(Updates prices, adds comments; changes byline, dateline, pvs
* Euro rises to just below 5-1/2-month high
* Euro zone flash inflation nears 2 percent
* U.S. wages data suggest Fed rate hike path stable
* Dollar jumps against loonie on NAFTA concerns
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Sam Forgione
NEW YORK, April 28 The euro rose against the
U.S. dollar on Friday after strong euro zone inflation figures,
while the dollar jumped against the yen after U.S. wages data
suggested the Federal Reserve would still hike interest rates
two more times this year.
Official flash estimates put euro zone inflation at 1.9
percent in the first quarter, on the verge of crossing over the
European Central Bank's target of below but close to 2 percent,
and above estimates for a rise of 1.8 percent. According to
standard EU measures, in Italy it was 2 percent.
That helped drive the euro as high as $1.0947, just
below a 5-1/2-month high of $1.0950 struck earlier in the week.
Analysts said the latest inflation figures could prompt the
ECB to take a more hawkish bent in its June statements by either
upgrading its assessment of the European economy or suggesting
less need for stimulus.
"The ECB will certainly have to build inflation into their
rhetoric at the June meeting, given the data," said Jason
Leinwand, founder and chief executive of FirstLine FX in
Randolph, New Jersey.
The dollar rose as much as 0.4 percent against the yen
to a session high of 111.71 yen, just below a nearly
four-week high of 111.77 touched April 26, after U.S. Labor
Department data showed private wages and salaries accelerated
0.9 percent in the first quarter. That marked the largest
increase in 10 years.
The data suggested firming inflation and helped boost the
dollar even as the Commerce Department said U.S. gross domestic
product increased at a 0.7 percent annual rate. That was the
weakest performance since the first quarter of 2014.
"The GDP data won’t alter the view that the Fed may raise
rates in June and then ultimately again in September," said Omer
Esiner, chief market analyst at Commonwealth Foreign Exchange
Inc in Washington.
The dollar was last up 0.2 percent against the yen at 111.51
yen. The dollar index, which measures the greenback
against a basket of six major rivals, was last mostly flat at
The greenback hit C$1.3697, its highest level
against the Canadian dollar since late Feb. 2016, on lingering
concern over U.S. President Donald Trump's dissatisfaction with
the North American Free Trade Agreement (NAFTA), a U.S., Mexico
and Canada trade pact.
(Reporting by Sam Forgione; Additional reporting by Patrick
Graham in London; Editing by Chizu Nomiyama)