Taper Talk Dominates Currency Markets

The euro was steady at $1.37 to begin the week as investors looked to the US Federal Reserve for signs that the bank would move to cut back on its stimulus spending. The common currency traded near a six week high against the dollar despite better than expected jobs data in the US According to

, the euro also found strength from expectations that the European Central Bank will maintain its current interest rate and monetary policies well into 2014. At the bank's December 5th policy meeting, the ECB chose not to take any further action and said it would wait to determine the best course of action. Moving forward, eurozone policymakers are expected to spend time discussing the region's banking union, specifically a resolution mechanism for failing banks. The region's finance ministers are set to convene this week in order to work out the details of the banking union before the new year. The Fed will be in the spotlight this week as investors look for clues about the US central bank's taper plans. Most don't expect the bank to make any cutbacks in December despite November's meeting minutes showing that some of the bank's members were ready to taper if economic data warranted it. US jobs data was unexpectedly positive last week, but investors didn't jump to conclusions about the Fed's taper. Instead, the focus will be on several of the bank's members including Lacker, Bullard and Fisher who are set to speak on Monday and Tuesday.