and less disruptive for markets, in particular given the expected improved foreign relations with the US (Chart 67). However, the currency remains overvalued and highly exposed to global factors, in particular oil price, and positioning is crowded. Despite our forecast is for USD/RUB to remain around 63 in 1Q17, we prefer to mitigate the above- mentioned risks by choosing a more favorable funding currency. If liquidity is a major consideration, we prefer to use the EUR as a funding currency, which offers negative carry vs the USD, and gives the ruble the best risk-adjusted carry across all potential funding currencies. In addition to the already seen impact on US rates, Trump’s victory implies that political risks are becoming increasingly important in Europe, with the Italian referendum in December and elections in Netherlands, Germany and France in 2017. This scenario strengthens our call for a six-month extension to ECB QE at the current pace. We expect the EUR/USD to trade at 1.05 by end 1Q17. Since short EUR/RUB is still exposed to much lower oil prices, an alternative way to express the trade is to use a basket of euro, Colombian peso and Canadian dollar as funding basket (Chart 66). The COP remains overvalued, the central bank is expected to ease monetary policy as the economy decelerates and oil represents 35% of Colombian exports. We expect the COP to depreciate 2.5% by end 1Q17. Carry, on the other hand, is higher than EUR and CAD. The CAD offers very low carry and we forecast a 1.5% depreciation by 1Q17 vs the USD. The economy keeps displaying weak growth and we expect the Bank of Canada likely to cut rates and maintain the accommodative stance of monetary policy. Asia: short SGD/INR We like short SGD/INR (spot 47.96, target 47, stop 48.44). While the performance of Asia FX can be influenced by broader risk conditions, we expect most to weaken vs. the USD. The Korean won and the Singapore dollar, as well as the Taiwanese dollar for instance stand out as b