Euro Soars Above $1.37 As Banking Union Plans Are Made

The euro maintained its position above $1.37 on Wednesday morning after soaring to a new six week high on Wednesday following news that eurozone finance ministers were closer to reaching a deal regarding the region's banking union. The common currency traded at $1.3758 at 5:15 GMT on Wednesday morning as confidence in the eurozone returned. The eurozone banking union is regarded by most as a necessary step that the bloc must take in order to avoid another financial meltdown. Although the region's policymakers agreed that the union must be established, there was some contention over how to set up a resolution mechanism that could support failing banks. This week, the eurozone's finance ministers met in Brussels in an attempt to iron out the details of a resolution mechanism before the new year. Reuters reported that some analysts see a deal being reached before the year is out, which has been positive for the common currency. Optimism surrounding the banking union coupled with the European Central Bank's less dovish attitude at December's policy meeting has taken the euro to new highs recently. Many expected the bank to consider implementing a negative deposit rate at the last meeting and were surprised to see the bank taking a more passive stance. The dollar was steady as taper watchers disregarded James Bullard's comments that the Fed may consider cutting down its stimulus as soon as December. Improved labor data from last week supported the case for a sooner than expected taper, however the dollar has remained level as most still expect the bank to cut back in March.