The euro stayed near two-week highs against many of its rivals on
Thursday, on rising bets the European Central Bank (ECB) may soon
announce it will start winding down its massive bond purchase programme.
The central bank’s chief economist Peter Praet, a close ally of
President Mario Draghi, said the ECB would debate next week whether to
end bond purchases later this year.
Jens Weidmann, the head of Germany’s central bank, said expectations the ECB would taper its bond-buying programme by the end of this year were plausible while his Dutch counterpart, Klaas Knot, said there was no reason to continue a quantitative easing programme.
The trio of comments drove the euro to a two-week high of $1.1800 sharp. The common currency last traded at $1.1781, extending its gains so far this week to 1.15 percent.
The euro strengthened against other currencies, hitting a two-week high of 1.1640 Swiss franc and 129.83 yen on Wednesday.
The ECB has been debating whether to end the unprecedented 2.55 trillion euro ($2.99 trillion) bond purchase programme this year as the threat of deflation has passed.
Still many market players were surprised by the flurry of comments as they had thought uncertainty caused by a political crisis in Italy could make policymakers cautious about indicating an end to stimulus at its policy meeting on June 14.
Indeed, the yield spread of Italian debt to German Bunds widened on Wednesday as Italian bonds are seen as the biggest beneficiary of the ECB’s buying.
Jens Weidmann, the head of Germany’s central bank, said expectations the ECB would taper its bond-buying programme by the end of this year were plausible while his Dutch counterpart, Klaas Knot, said there was no reason to continue a quantitative easing programme.
The trio of comments drove the euro to a two-week high of $1.1800 sharp. The common currency last traded at $1.1781, extending its gains so far this week to 1.15 percent.
The euro strengthened against other currencies, hitting a two-week high of 1.1640 Swiss franc and 129.83 yen on Wednesday.
The ECB has been debating whether to end the unprecedented 2.55 trillion euro ($2.99 trillion) bond purchase programme this year as the threat of deflation has passed.
Still many market players were surprised by the flurry of comments as they had thought uncertainty caused by a political crisis in Italy could make policymakers cautious about indicating an end to stimulus at its policy meeting on June 14.
Indeed, the yield spread of Italian debt to German Bunds widened on Wednesday as Italian bonds are seen as the biggest beneficiary of the ECB’s buying.
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