LONDON, July 20 Reuters The euro held near twoweek highs versus the dollar on Wednesday on expectations of a bigger ECB interest rate increase this week than earlier anticipated and a Reuters report that a key Russian gas pipeline would reopen on time after maintenance.

Both events the European Central Bank ECB meeting and the reopening of the Nord Stream 1 conduit after a 10day shutdown are due on Thursday, leaving markets on tenterhooks.

But the euro benefited from news the ECB was considering a 50basispoint interest rate hike, having earlier flagged 25 bps.

On Tuesday the report, citing two sources, helped the euro clock its strongest daily gain in a month. On Wednesday the currency firmed as much as 0.5 to 1.02730, the highest since early June, before easing off those levels.

It also rose 0.25 against sterling, to 85.4 pence .

A discussion regarding 50 bps is justified and it will all then depend on what ECB does visavis the monetary policy transmission protection mechanism and then on further rate hikes, said Peter Kinsella, global head of FX strategy at asset manager UBP.

He was referring to the ECB39;s plans for a socalled antifragmentation tool to shield Italy and other weak euro zone states from higher borrowing costs. The ECB is meant to detail these plans at its Thursday meeting.

On Nord Stream, Reuters reported supplies would restart on time, albeit at well below full capacity.

But the European Union will detail energy emergency plans later on…