The euro stayed near two-week highs against many of its rivals on Thursday, on rising bets the European Central Bank (ECB) may announce it will wind down its stimulus programme by year-end as early as next week.

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 wind down 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.

Those remarks drove up the euro to a two-week high of $1.17955 on Wednesday. The common currency last traded at $1.1781, extending its gains so far this week to 1.0 per cent. “In the near term, we are likely to see event-driven trading on the euro. We should expect the euro to jump 100 pips (one cent) quite easily on comments from key officials,” said Kyosuke Suzuki, director of forex at Societe Generale.

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.

The euro strengthened against other currencies, hitting a two-week high of 1.1640 Swiss franc and 129.83 yen. The yen is weakening against many currencies as easing concerns over Italian politics and a tech-driven rally in global shares improve risk sentiment.

The dollar extended its recovery from a five-week low of 108.115 yen touched on May 29 and last stood at 110.15 yen , having hit a two-week high of 110.27 in late US trade on Wednesday.

Still, concerns about trade frictions could keep a tab on the dollar against the yen as US President Donald Trump looks set to clash with other Group of Seven leaders at their weekend summit. The growth-sensitive Australian dollar hit a 1-1/2-month high of 76.77 cents on Wednesday, and last stood at 76.68 cents, underpinned in part by the country's strong economic growth data published on Wednesday.

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