Morgan Stanley Research sees a scope for EUR/USD to rise above 1.20 on the UST buyback program.

"The return of this US currency policy narrative could push EUR/USD back to a roughly 3% premium to its yield-implied level in the near term. Given that current levels of 2y German-US yield differentials are consistent with EUR/USD around 1.18, we see room for EUR/USD to rise toward 1.2150 if yields remain stable," MS notes.

"Given our continued expectation for relatively subdued FX volatility, we expect this shift to unfold over time. We continue to expect AUD to outperform given its elevated carry and relatively clean positioning," MS adds.