Rabobank - "Over the last couple of months we have observed that the eurodollar recovered and briefly traded above the 1,31-mark... we look at the changes in risk reversals as an indicator for sentiment regarding the eurozone. We find that the move to 1.20 was largely driven by lower chances on QE3 and the lower interest rates by the ECB that outweighed the positive mood regarding the eurozone as equity markets started to recover. More recently, the positive sentiment regarding the eurozone plus the expectations of an announcement on QE3 have pushed the eurodollar higher. This view is being supported by higher risk reversals on the Swiss franc and slowing purchases by the central bank. Indeed, the currency portfolio advanced very slowly by less than CHF10 billion in September. In terms where we are standing now in the crisis, the good news is that the eurodollar risk reversal has returned to a level just before the European sovereign debt crisis took a sharp turn for the worse, albeit that other currencies are still lagging. Indeed, tail risk has not disappeared altogether."