Bank of Tokyo-Mitsubishi - "The performance of EUR/USD since setting its most recent intra-day low of 1.2043 on 24th July is certainly indicative of investor scepticism over recent policy steps taken to arrest the euro-zone crisis. The move higher incorporated two key policy steps – the announcement of OMT by the ECB and QE3 by the Federal Reserve. On QE3 alone if the move from that July low to the September high of 1.3172 is complete, it would mark the smallest dollar sell-off of the three QE policy steps to date. QE1 lifted EUR/USD by 17.5% over a seven-month period while QE2 lifted EUR/USD by 13.5% over a three-month period while QE3 lifted EUR/USD by 9.4% over a two-month period. The fact the QE3 EUR/USD move also encompassed the OMT announcement makes the more muted performance of the euro even more telling. There are a number of factors coming to the fore that reassure us of our continued bearish euro view notwithstanding a potential rebound over the short-term on say the activation of OMT. We still see sub-1.2000 levels as probable for 2013."