Our preference is that the next major leg of the Dollar decline probably comes through late in the second quarter as the Fed launches into its easing cycle. 

Rate spreads should eventually prove positive for EUR/USD – especially as European Central Bank (ECB) easing expectations seem far too aggressive – but again, it should be in the second half that the currency pair embarks on its rally to 1.15. Until then, we expect choppy conditions for the major currencies and also expect investors to continue their search for yield.