Euro Continues Its Climb

The euro continued its upward climb on Wednesday as markets waited for the second day of the US Federal Reserve meeting to come to a close. Most investors seem convinced that the days of super-cheap money are nearing their end and have been positioning for that.

The Fed's policy meeting is set to end at 18:00 GMT on Wednesday when the bank will issue its post meeting policy statement. Following the statement, Chairman Ben Bernanke's highly anticipated press conference will begin a half hour later. Bernanke is expected to announce that the bank will be continuing its $85 billion per month bond buying plan, but could ease up later in the year if US labor data shows the market is improving.

While most central bankers are devaluing their currencies, European Central Bank President Mario Draghi seems to be behind the curve as his own currency continues to climb. In 2013, the euro has seen a 4.6 percent rise in value, causing many to raise their forecast for the common currency. Although the euro's gains have reflected growing investor confidence in the eurozone's policy makers and their ability to keep the region from breaking up, an expensive euro means expensive exports for the region.

According to Bloomberg, goods sold to countries outside the eurozone fell by 0.8 percent in the first quarter. With the several of the region's member countries struggling to get back on their feet, being competitive in the export market is an important factor. Since the past two ECB meetings have sparked speculation that the bank could lower deposit rates below zero, which would flood the market with euros, many are not expecting the euro's strength to last forever. Draghi has been reassuring investors that the bank has the tools to compete in the ongoing currency war, but he has yet to use them.

BY Laura Brodbeck