Citigroup noted in its latest report that risks to French public finances could constrain further monetary policy tightening by the European Central Bank (ECB). The bank expects the ECB to pause its actions after a December rate hike, or even sooner; the Euro against the US Dollar (EUR/USD) could also fall below 1.10 as a result. Citigroup interest rate strategists believe that market sentiment towards further monetary policy tightening is changing, and investors may be concerned that rate hikes could exacerbate the tightening of financial conditions. Citigroup FX strategists anticipate that if the two-year interest rate differential between the Eurozone and the US narrows by 50 to 75 basis points, EUR/USD could fall to the 1.1075 to 1.1000 range. Citigroup's preferred trading strategy is to go long on Federal Reserve rates and short on ECB rates, betting on a further downward revision of ECB rate expectations relative to the Federal Reserve.