June 7, 2018 / 7:04 PM / a year ago

FOREX-Euro rises to 3-week high on bets ECB to signal stimulus end

    * ECB officials say to debate QE end next week
    * Some analysts say stimulus decision to come in July, not
    * Mood cautious ahead of G7 meeting
    * Graphic: World FX rates in 2018 tmsnrt.rs/2egbfVh

 (Adds comment, updates prices in text, table)
    By Gertrude Chavez-Dreyfuss
    NEW YORK, June 7 (Reuters) - The euro scaled three-week
peaks against the dollar on Thursday  as investors boosted their
bets that the European Central Bank at next week's monetary
policy meeting will flag the winding down of its vast
bond-buying program by the end of this year.
    Since hitting a 10-month low last week, the euro has gained
nearly 3 percent against the dollar and is on track to post its
largest weekly gain in four months.
    The ECB's chief economist, Peter Praet, a close ally of bank
President Mario Draghi, said on Wednesday the central bank at
its policy meeting next week would debate whether to end bond
purchases later this year.
    Other ECB officials echoed Praet's sentiment.
    Jens Weidmann, the head of Germany's central bank, also said
on Wednesday expectations the ECB would taper its bond-buying
program by the end of this year were plausible, while Weidmann's
Dutch counterpart, Klaas Knot, said there was no reason to
continue a quantitative easing program.

    The comments drove the euro on Thursday to $1.1840,
the highest since May 17. It was last up 0.3 percent at $1.1812.
    Some analysts have taken the comments from ECB officials
this week as suggesting a decision on the stimulus is coming at
the June 14 meeting.
    "If the ECB wanted to counter expectations of an imminent   
policy announcement, it might already have said publicly that
the market reaction has been unwarranted," said Capital
Economics in a research note.
    But all things considered, the research firm believes that
the ECB will make some form of announcement on quantitative
easing at next week's meeting.
    Others in the market, however, saw the comments as the
starting point in a debate that will likely culminate in an
announcement in July.
    "The key point is that we think the ECB will favor waiting
for further evidence from hard activity data that Q2 growth has
rebounded from weak levels in Q1 before providing concrete
guidance on QE," said Sam Lynton-Brown, FX strategist, at BNP
    The euro's gains have pushed the dollar index, a measure
heavily weighted toward Europe's single currency, to a
three-week low as well. The dollar index was last down
0.3 percent at 93.369.
    Many, however, remain cautious ahead of a summit this
weekend of the Group of Seven leaders, where U.S. President
Donald Trump looks set to clash with his counterparts over
    "The trade stance of the U.S. administration worries
economists because it could hurt business confidence that drives
 waves of investment and spending," said Juan Perez, senior
currency trader at Tempus Consulting in Washington.
    Currency bid prices at 2:48PM (1848 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct     High Bid    Low Bid
                                              Previous                   Change                 
 Euro/Dollar      EUR=        $1.1809        $1.1773     +0.31%         -1.56%      +1.1840     +1.1773
 Dollar/Yen       JPY=        109.7100       110.1600    -0.41%         -2.63%      +110.2100   +109.5000
 Euro/Yen         EURJPY=     129.62         129.71      -0.07%         -4.11%      +130.2700   +129.3200
 Dollar/Swiss     CHF=        0.9800         0.9861      -0.62%         +0.59%      +0.9868     +0.9789
 Sterling/Dollar  GBP=        1.3425         1.3411      +0.10%         -0.64%      +1.3471     +1.3373
 Dollar/Canadian  CAD=        1.2973         1.2942      +0.24%         +3.15%      +1.3001     +1.2935
 Australian/Doll  AUD=        0.7623         0.7666      -0.56%         -2.28%      +0.7673     +0.7613
 Euro/Swiss       EURCHF=     1.1579         1.1612      -0.28%         -0.94%      +1.1635     +1.1559
 Euro/Sterling    EURGBP=     0.8795         0.8776      +0.22%         -0.99%      +0.8837     +0.8776
 NZ               NZD=        0.7031         0.7030      +0.01%         -0.78%      +0.7056     +0.7024
 Dollar/Norway    NOK=        8.0473         8.0785      -0.39%         -1.95%      +8.0805     +8.0237
 Euro/Norway      EURNOK=     9.5061         9.5133      -0.08%         -3.48%      +9.5189     +9.4912
 Dollar/Sweden    SEK=        8.6850         8.7321      -0.18%         +5.89%      +8.7334     +8.6549
 Euro/Sweden      EURSEK=     10.2623        10.2805     -0.18%         +4.30%      +10.2870    +10.2359
 (Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Richard Leong in New York; Editing by Dan Grebler and Jonathan
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