"We used the recent rally in EURUSD to add a short position to our portfolio. Our arguments for a weaker EUR have not changed. In the absence of further political integration, the ECB may have to remain accommodative to support the struggling periphery even as the core overheats. As EMU inflation shows signs of rising, real yields may decline to weaken the EUR. The risk of rising populism with the upcoming elections in the Netherlands, France and Germany will also be an undertone for the currency. We'll pay particular attention to the ECB's rhetoric on the recent upside surprise in inflation".