The Euro's Surprises May Just Be Getting Started

The euro is on the move, due to positive fundamental and technical reasons. And there is likely still more upside ahead -- potentially a lot more. The European Central Bank meets Thursday, and although this gathering may be ho-hum, with no real changes in policy, the realities of a strong economy will put pressure on the bank's president, Mario Draghi, to start mapping an exit strategy from ultra-accommodative measures before inflation becomes a problem.

In 2017, the shared currency had its best year against the dollar since 2003, rising from a low of about $1.04 in early January to finish at $1.20. Bearish parity forecasts were prevalent at the beginning of 2017, but fundamentally strong euro-zone economic data supported the euro throughout the year, which I predicted last January.