Goldman Sachs maintains a bullish bias on the USD targeting a re-test of parity in EUR/USD over the coming months.
"Our economists still think a step down to 50bps is most likely at the next meeting, but see risks that rate hikes could be more frontloaded. But, with the market still pricing cuts next year, the bottom line is that we still see upside risks to inflation and policy pricing over the next few months," GS notes.
"Overall, we continue to see upside risks to real yields in the US, and downside risks for the ECB. As a result, we think EUR/USD can re-test parity in the months ahead," GS adds.