Credit Agricole sees the euro declining further towards the end of the year, as the ECB's focus has fallen on Eurozone's external competitiveness. Combined with reserve-rebalancing pressures, EUR/USD should decline to 1.28 during Q4. From a pure currency perspective, the latest ECB policy turn is likely to drive an even greater ‘yield-wedge’ between EUR, USD and other core currencies. With a majority of investors surprised by this greater ECB determination to lift Eurozone competitiveness, such selling pressure should prove relatively consistent. In terms of the external sector, ECB policy actions will also amplify the negative impact of central bank reserve-recycling upon EUR.