June 6, 2018 / 8:07 PM / 9 months ago

FOREX-Euro gains after ECB comments on ending stimulus

    * ECB to discuss at upcoming meeting unwinding QE 
    * Speech by Italian PM Conte mixed blessing for euro
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Adds comment; updates prices)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, June 6 (Reuters) - The euro rose to a nearly
two-week high against the dollar on Wednesday after officials
said the European Central Bank could wind down its stimulus
program by the end of the year, as inflation has risen to its
    Europe's common currency was on track to post its largest 
weekly gain versus the dollar since mid-February.
    Having revived growth with an unprecedented 2.55 trillion
euro ($2.99 trillion) bond purchase program, the ECB has been
debating whether to end the purchases this year as the threat of
deflation has passed and the bloc is on its best growth run in a
    Many traders have expected the central bank would remain
cautious at its next policy meeting, on June 14, given the
uncertainty caused by a political crisis in Italy. 
    But ECB chief economist Peter Praet said on Wednesday the
central bank would debate next week whether to unwind bond
purchases gradually.
    Praet's comments pushed the euro to $1.1796, the
highest level since May 22. It was last up 0.5 percent at
    "A breach of the $1.18 barrier will attract more euro
bulls," said Viash Sreemuntoo, corporate trader at XE.
    Germany's central bank head said market expectations for an
end to bond-buying this year were plausible.
    "The ECB had been somewhat cagey about how it will end the
stimulus program precisely beyond September," said Richard
Franulovich, head of FX strategy at Westpac in New York.
    "Delaying a decision until September was never a realistic
possibility. That would raise a fairly disorderly adjustment for
markets," he added.
    As well as boosting the euro, analysts said the comments
would introduce heightened volatility in the options markets
over the ECB meeting.
    The euro's rise put pressure on the U.S. dollar index
, which measures the greenback versus a basket of six
major currencies. The index fell 0.3 percent to 93.623.
    The ECB comments followed a speech by Italy's new prime
minister, Giuseppe Conte, whose promise of radical change had a
mixed impact on the euro.
    "The Italians have a government and it is doing what it said
it would do," said John Taylor, president and founder of
research firm Taylor Global Vision in New York.
    "In itself that should be normal, but in this case it is
shocking to the idea of Europe as it has be constructed by
Brussels, the German government and the ECB/Bundesbank," he
    Currency bid prices at 3:54PM (1954 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1772        $1.1717     +0.47%         -1.87%      +1.1796     +1.1711
 Dollar/Yen       JPY=        110.2000       109.7800    +0.38%         -2.19%      +110.2600   +109.7900
 Euro/Yen         EURJPY=     129.74         128.65      +0.85%         -4.02%      +129.8200   +128.6200
 Dollar/Swiss     CHF=        0.9862         0.9844      +0.18%         +1.22%      +0.9885     +0.9836
 Sterling/Dollar  GBP=        1.3413         1.3394      +0.14%         -0.73%      +1.3443     +1.3385
 Dollar/Canadian  CAD=        1.2951         1.2968      -0.13%         +2.97%      +1.2974     +1.2859
 Australian/Doll  AUD=        0.7665         0.7615      +0.66%         -1.74%      +0.7676     +0.7614
 Euro/Swiss       EURCHF=     1.1612         1.1535      +0.67%         -0.66%      +1.1639     +1.1532
 Euro/Sterling    EURGBP=     0.8776         0.8749      +0.31%         -1.20%      +0.8788     +0.8740
 NZ Dollar/Dolar  NZD=        0.7033         0.7023      +0.14%         -0.75%      +0.7059     +0.7022
 Dollar/Norway    NOK=        8.0798         8.1101      -0.37%         -1.55%      +8.1191     +8.0637
 Euro/Norway      EURNOK=     9.5135         9.5043      +0.10%         -3.39%      +9.5452     +9.4924
 Dollar/Sweden    SEK=        8.7315         8.7500      +0.28%         +6.46%      +8.7544     +8.7049
 Euro/Sweden      EURSEK=     10.2800        10.2510     +0.28%         +4.48%      +10.2923    +10.2375
 (Reporting by Gertrude Chavez-Dreyfuss; Editing by Dan Grebler
and Leslie Adler)
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