Euro Strong Heading Into 2014

The euro traded steadily at $1.3794 at 6:30 GMT on Tuesday morning after climbing on Monday as eurozone banks prepared to pay back cheap loans to the ECB. The common currency has had a strong end of the year as confidence returned to the region and its banks prepareed for strict asset quality reviews.

However, many see the common currency's strength dwindling in 2014 after the reviews have been conducted. At the moment, eurozone banks are repatriating funds in order to firm up their capital bases before the European Central Bank conducts its evaluations. Also supporting the euro were comments from ECB President Mario Draghi which indicated that the bank is not worried about deflation. Draghi said that he doesn't see any immediate need to cut the region's key interest rate as there have been no further signs of deflation. German Chancellor Angela Merkel is set to make her traditional New Year's Eve address on Tuesday night, in which she will call on Germans to help her permanently resolve the eurozone's sovereign debt crisis. Although many Germans have become wary of continuing to shoulder the burden of their financially strapped neighbors,

reported that Merkel will insist that the fate of Germany is closely tied to that of the eurozone as a whole. Merkel's initial resistance to helping other eurozone countries at the beginning of the financial crisis as been criticized by many economists who say her decisions at that time exacerbated the crisis.