(Adds Salvini comments, updates prices)
By Karen Brettell
NEW YORK, May 17 (Reuters) - The dollar rose on Friday asconcern about next week's European parliamentary electionsdented demand for the euro, while the British pound dropped to afour-month low on worries about Britain's exit from the EuropeanUnion.
The euro has been hurt this week by Italian Deputy PrimeMinister Matteo Salvini's comments that European Union rulesharm his country.
The elections will shake up the continent, leading to arelaxation of budget rules and influencing the choice of thenext central bank chief, Salvini said on Friday. urn:newsml:reuters.com:*:nL5N22T4EJ
"The market is a little bit concerned about Europeanelections. It seems to be a flow into the dollar as a bastion oflast resort," said Boris Schlossberg, managing director offoreign exchange strategy at BK Asset Management in New York.
The euro briefly pared losses after the White House saidPresident Donald Trump is delaying a decision for as long as sixmonths on whether to impose tariffs on imported cars and partsto allow for more time for trade talks with the EU and Japan. urn:newsml:reuters.com:*:nL2N22T0B5
Sterling fell to the lowest since Jan. 15 after cross-partyBrexit talks collapsed and concern grew about the impact PrimeMinister Theresa May's likely resignation would have onBritain's exit from the EU. urn:newsml:reuters.com:*:nL5N22T2DC
The offshore Chinese yuan fell to its lowest levels sinceNovember after China said the United States must show sincerityif it is to hold meaningful trade talks as Trump dramaticallyraised the stakes with a potentially devastating blow to Chinesetech giant Huawei Technologies Co LtdHWT.UL . urn:newsml:reuters.com:*:nL4N22T0XY
The world's two largest economies are locked in anincreasingly acrimonious trade dispute in which they haveimposed escalating tariffs on each other's imports.
"Rhetoric from both sides is getting more heated, making aU.S.-China deal seem a long way off," Win Thin, global head ofcurrency strategy at Brown Brothers Harriman in New York, saidin a report.
"At this point, this means there will be no high-levelnegotiations between the two until a potential Trump-Xi(Jinping) meeting at the G20 meeting in late June. This meansthe next round of tariffs will likely come into play, signalingfurther escalation and making a deal that much harder," Thinsaid.
The Australian dollar AUD= dropped to its lowest levelsince Jan. 3 on the escalating trade tensions. urn:newsml:reuters.com:*:nL4N22T1PL
Data on Friday showed U.S. consumer sentiment jumped to a15-year high in early May on growing confidence over theeconomy's outlook, though much of the surge was recorded beforethe trade war escalation. urn:newsml:reuters.com:*:nL2N22T0NJ
Currency bid prices at 2:06PM (1806 GMT) Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Session Euro/Dollar EUR= $1.1161$1.1172 -0.10% -2.69% +1.1184 +1.1156 Dollar/Yen JPY= 110.0300 109.8400 +0.17% -0.21% +110.1700 +109.5100 Euro/Yen EURJPY= 122.83 122.73 +0.08% -2.69% +122.9700 +122.2900 Dollar/Swiss CHF= 1.0108 1.0098 +0.10% +3.00% +1.0121 +1.0086 Sterling/Dollar GBP= 1.2727 1.2795 -0.53% -0.24% +1.2807 +1.2720 Dollar/Canadian CAD= 1.3442 1.3457 -0.11% -1.42% +1.3513 +1.3434 Australian/Doll AUD= 0.6871 0.6892 -0.30% -2.53% +0.6897 +0.6872 ar Euro/Swiss EURCHF= 1.1283 1.1284 -0.01% +0.26% +1.1299 +1.1270 Euro/Sterling EURGBP= 0.8770 0.8730 +0.46% -2.38% +0.8778 +0.8728 NZ NZD= 0.6519 0.6534 -0.23% -2.95% +0.6546 +0.6520 Dollar/Dollar Dollar/Norway NOK= 8.7795 8.7440 +0.41% +1.63% +8.7897 +8.7399 Euro/Norway EURNOK= 9.8015 9.7821 +0.20% -1.05% +9.8142 +9.7764 Dollar/Sweden SEK= 9.6403 9.6370 -0.06% +7.55% +9.6536 +9.6178 Euro/Sweden EURSEK= 10.7633 10.7703 -0.06% +4.86% +10.7888 +10.7490
(Reporting by Karen Brettell; Editing by Jonathan Oatis, DanGrebler and Richard Chang) ((Karen.Brettell@thomsonreuters.com; +1 646 223 6274; ReutersMessaging: firstname.lastname@example.org))