The euro is only set to get stronger this week, according to currency analysts, with the dollar weakening further against the single currency as the U.S. Federal Reserve is poised to put delay "tapering" its bond-buying program.
The euro was trading at 1.3808 against the dollar on Monday morning, its highest level for nearly two years and testing resistance at the $1.3830 mark. According to Kit Juckes, global head of foreign exchange strategy at Societe Generale, the euro's buoyancy looks set to continue for some time.
"Relative rates and lack of risk-aversion in Europe are supporting the euro," he said in a morning note on Monday. Any bear-ish hopes that a round of surprise bad economic news will shake the euro into a downside spin are set to be disappointed, Juckes added.
Research last week from Valentin Marinov, director of FX Strategy at Citi shows that data surprises and the euro have now become decoupled. After tracking closely for the first half the year, the euro has surged higher since August whilst data has remained relatively flat.
(Read More: Dollar braces for dovish Fed, gloomy US data)
"This 'europhoria' is starting to run ahead of fundamentals," he said in a research note on Thursday.
Analysts believe that it's central bank rhetoric rather than sold data behind this trend. The dollar has slumped in recent weeks with a partial government shutdown in the U.S. and a potential debt default weighing on the currency.
The Fed is widely expected to extend its $85 billion-a-month asset purchase program when it meets on Wednesday, with the shutdown likely to hit growth data in the United States. This extra liquidity would push the dollar even lower with investors turning instead to currencies that aren't affected by quantitative easing (QE) - like the euro.
"The recent strength of the euro is not so surprising given that (European Central Bank) ECB is the only G3 central bank not engaged in QE (at least for now)," Cynthia Kalasopatan of Mizuho Bank said in a morning note on Monday.