Goldman Sachs - "Our long-term views are driven by our structural bearish stance on the USD. The weak balance of payments of the US vs. the stronger BBoP trend for the Euro area still implies a gradually weaker USD and a stronger EUR. Following the announcement of the ECB’s OMT programme in September, there was a strong rally in the EUR due to a perceived reduction in Euro area tail risk. In the last month however, EUR has fallen due to uncertainty resulting from the Italian election. While downside risk remains in the Euro area due to policy implementation risk and growth underperformance linked to front-loaded fiscal tightening, in the longer run – and after more 'muddling through' – we expect gradual progress with deeper integration in the Euro area, which should ultimately boost the EUR. Many investors have substantially reduced EUR exposure during the crisis, including central banks, and further normalisation could push EUR/USD higher."