* Commodity currencies continue to struggle
* Kiwi down 0.7 percent
* Euro steadies at 5-1/2 month high, yen falls again
* Graphic: World FX rates in 2017 tmsnrt.rs/2egbfVh
By Patrick Graham
LONDON, April 26 (Reuters) - The Australian and New Zealand dollars sank on Wednesday, leading moves among major developed currencies after Australian inflation data pointed to an economy under strain from mediocre growth in China.
The euro pulled back from 5-1/2 month highs overnight as the boost from the outcome of Sunday's first round of France's presidential election faded, while the yen - a sufferer this week from buoyant sentiment on stock markets - fell another 0.3 percent.
Traders said the Aussie, kiwi and Canadian dollars - all of which normally gain when investors are feeling good about global growth prospects - were still suffering from steady falls in a number of major commodity markets since February.
While global stock markets have bounced to new highs since the French vote, improved appetite for risk on currency markets seems largely confined to Europe, spurred by expectations of a change in the direction of European Central Bank policy in coming months.
Headline Australian inflation rose to 2.1 percent, initially pushing the dollar higher, but the indicators of underlying core inflation were less bright, dragging the currency down.
"The fundamental reason for Australia's problems is China and the rotten time that commodities have had since February as a result," said Bank of New York Mellon strategist Simon Derrick.
The Aussie was down 0.6 percent at $0.7491 in early European trade, its lowest since April 12. The kiwi lost 0.7 percent to $0.6898.
With global stocks enjoying another day of gains, the dollar rose 0.3 percent to 111.38 yen, pulling further away from a five-month low of 108.13 yen set last week.
The focus for the dollar will be on forthcoming U.S. economic data, especially after a softening in some recent indicators, said Teppei Ino, analyst for Bank of Tokyo-Mitsubishi UFJ in Singapore.
"It's too early to say that the dollar will keep trending higher and head above the peak it saw in March," Ino said, referring to the dollar's March 10 high of 115.51 yen.
The Trump administration's plans for tax reforms are likely to be another reference point for markets.
U.S. officials said late on Tuesday that Trump is proposing to slash the corporate income tax rate and offer multinational businesses a steep tax break on overseas profits brought into the United States.
Analysts said there was still uncertainty over just how quickly such fiscal policies would be implemented.
"Just presenting the plan doesn't mean the plan is going to be passed," said Mitul Kotecha, head of Asia macro strategy for Barclays.
"The reality is any tax changes or tax reforms or tax cuts, may not take place for some time, and Congress at this point is far from being agreed on what shape or form they are going to take."
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
Additional reporting by Masayuki Kitano in TOKYO, editing by John Stonestreet