The euro started off 2014 on a bright note trading steadily at $1.3748 at 6:30 GMT on Thursday morning. The common currency has been lifted by eurozone policymakers' commitment to stabilizing the region and preventing another sovereign debt crisis.
The new year will bring about many changes for the bloc, most notably the implementation of a unified banking union, expected to be put into place later in the year. The plans for a banking union are still under construction as the region's leaders will have to agree on the terms of the union before it can be implemented.
However, the European Central Bank is expected to begin with its asset quality reviews this year in preparation for the new banking system. Bank President Mario Draghi was very open about the difficulty of the tests, saying the evaluation would need to be rigorous in order to be trustworthy and that some of the region's banks would likely fail.
Latvia adopted the euro on the first of January, a nation that eurozone policy-makers have said is a shining example that austerity can lead to prosperity. Reuters reported that European Commission President Jose Manuel Barroso remarked that Latvia's commitment to following through with austerity programs meant the nation was able to enter into the common currency “stronger than ever”. Standard & Poor's and Fitch ratings agencies increased Latvia's credit rating ahead of the switch, noting that investment in the tiny economy would be more attractive without the currency risk.
Latvia is the eurozone's 18th member and will be the fourth smallest economy in the currency bloc, following Malta, Estonia and Cyprus.