MUFG Research discusses the USD outlook and targets USD/JPY at 135 and EUR/USD at 0.99 by end of Q3.

"Recent developments support our view for a weaker US dollar in the year ahead although we believe it is premature to say the US dollar has already peaked more broadly. We await a bigger dovish Fed pivot later this year," MUFG notes. 

"We don’t expect the tentative rebound in global equity markets to be sustained. Intensifying fears over a sharper global slowdown should continue to support a stronger US dollar in the near-term apart from against the yen," MUFG adds.