Salient to Investors:

The euro has strengthened 4.6 percent in 2013, the most among 10 developed-market currencies, indicating revealing how far Draghi is falling behind in the foreign-exchange wars. The gain shows investors are confident that Draghi et al are doing enough to hold the euro region together, but threatens the ability of member nations to export their way out of recession.

David Bloom at HSBC said the euro is confounding all its critics once again as Draghi had a dabble in the war and everyone else is cutting rates or intervening, and seeing their currencies weaken.

Strategists expects the euro to end Q1 2014 at $1.27. The OECD says the euro is 7.2 percent too strong against the dollar based on relative costs of goods and services.

Stephen Jen at SLJ Macro Partners says the euro’s strength has made him reluctant to sell the currency, despite it being overpriced based on the performance of the economy. Jen said the ECB has been harder to read than the Fed, the BOJ or the BOE, and the euro is agitating to push lower though not as far as to its reasonable level of $1.17.

Bill Street at State Street Global Advisors said as risky assets do well, the euro does well and its strength can continue.

Vincent Chaigneau at Societe General says the weak economy will weigh on the euro and force the central bank to take more measures, and is recommending selling the euro against the US and Australian dollars. Chaigneau said the euro’s rise is not welcome when the economy is lagging and is unsustainable and fundamentally makes no sense.

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