We still believe that, longer term, the probability the Euro/USD exchange rate heads towards 1.30-1.35 is a reasonable expectation based on signs that the region’s economy is mending. However, recent developments have sent the Euro lower versus the dollar. Much of the weakness may be attributed to the Spanish federal government’s decision to dissolve Catalan regional autonomy, which has created a considerable amount of social unrest. The Euro is currently trading around 1.16 which is critical because it is below its intermediate term trend and sentiment could force it even lower.