"Given that every time the market is optimistic that further escalation is unlikely, the dollar weakens, it still seems likely that we will see EUR/USD 1.20 again, and a generally weaker dollar, in the coming weeks," SocGen notes.

 

"But for EUR/USD this means economics argues for a fall below 1.15 this year, while US policy uncertainty argues for a rise above 1.20. The current 1.1750 might as well be seen as the average of those two outcomes, which defines the range we find ourselves in," SocGen adds.