* Euro zone growth suggests ECB will keep raising rates
* US CPI data hurts the dollar with Fed likely on hold
(Recasts, updates prices, adds details, adds quote, changes dateline, previous LONDON)
NEW YORK, May 13 (Reuters) - The euro climbed against the dollar on Friday after strong growth data in Germany and France bolstered expectations a healthy euro zone economy will keep interest rates in the region higher than their U.S. equivalents.
A report showing U.S. consumer prices rose as expected in April on higher food and energy prices added to the dollar's weakness, as there was little sign of a broader pick-up in inflation that would trouble the Federal Reserve. [ID:nOAT004810].
But some analysts said the euro's rebound from recent losses could prove short-lived as concerns about debt problems in peripheral euro zone states may outweigh rate differentials.
"If the U.S. inflation number had come in worse than expected it would have pressured the Fed but that didn't happen and the market is a little bit short euro after the sell off in recent days," said Joseph Trevisani, chief market analyst at FX Solutions in Saddle River, New Jersey.
The euro's
The euro
The session peak came after the German economy grew 1.5 percent in January-March from the previous quarter, while French GDP rose 1.0 percent. Both readings exceeded forecasts, as did an 0.8 percent rise in the overall euro zone economy.
"Today's move is really a relief rally on the back of the stronger GDP figures," said Lee Hardman, currency economist at BTM-UFJ in London. "But there is still divergence in the growth performance in the (euro zone) member states.
"We still believe a weak euro will be required for a solution to the euro zone's problems, and we don't think this near-term bounce will be sustained," he said.
Figures also showed Portugal entered a technical recession, highlighting the growth gulf between countries in the region.
EURO ZONE CONCERNS
The German and French data helped the euro recover from recent sharp falls triggered by talk Greece may need to restructure its debts.
The dollar also gave back some of the gains made in the past week as a rout in commodity prices hurt risk appetite, prompting unwinding of dollar-funded bets on risky assets.
"We've had the stronger European GDP numbers ... and it's starting to feel like we're getting to the end of the risk aversion trade," said Geoff Kendrick, currency strategist at Nomura in London.
Friday's euro zone GDP data added weight to the view that a buoyant economy will add to inflation risks, making the European Central Bank more likely to raise rates in the coming months, while the U.S. Federal Reserve is expected to keep policy loose.
A meeting of Eurogroup finance ministers on Monday, followed by an Ecofin meeting of EU finance ministers, could provide further direction to the single currency. [ID:nLDE66D1JB]
There are doubts whether a substantial agreement to help Greece manage its debts is likely to emerge from the meetings, keeping uncertainty high over how long the country can avoid a restructuring and making some investors reluctant to load up too much on risky assets, analysts said.
The euro fell 0.2 percent against the yen
The dollar was down 0.3 percent against the yen at 80.66
yen
The dollar was little changed against the yen on the week but the euro fell 0.8 percent against the dollar at current prices. (Additional reporting by Naomi Tajitsu and Anna Yukhananov in London) (Reporting by Nick Olivari, Editing by Chizu Nomiyama )