The euro strengthened against most of the majors currencies during last week's trading session. The 17-nation currency gained about 100 pips vs. both the U.S. dollar and the British pound. As a result, the EUR/USD par climbed above the 1.3800 level, and the EUR/GBP cross was trading near the 0.8600 level.

The euro climbed against most of its rivals after reports have shown that the German economy is recovering at a faster pace than previously estimated. German business confidence unexpectedly rose to a new record high in February. The survey rose to 111.2 from 110.3 in January, beating analysts' expectations that the end result will remain at 110.3. In addition, new industry orders in the euro-zone also unexpectedly rose in December, reaching their highest level in almost two and a half years.

Another reason for the euro's bullishness is the ongoing speculation that the European Central Bank (ECB) will hike interest rates in March in order to fight rising inflation.

As for the week ahead, the most significant economic release from the euro-zone will surely be the Minimum Bid Rate, which is scheduled for Thursday. This is the ECB's interest rates decision for March. If the ECB will indeed decide to hike rates, the euro may see another bullish session this week. Traders should also follow the euro-zone's Consumer Price Index (CPI) reports which are expected today. The CPI is considered to be the most reliable inflation gauge, and the result is likely to have a significant affect on the ECB's interest rates decision.