Barclays Research discusses the USD outlook and sees a scope for further weakness over the medium-term.
"Sharper-than-expected deceleration of US CPI and PPI paved the way for weaker USD last week as the market is now pricing larger rate cuts from the Fed later this year. With European IP printing firm and Chinese data continuing to surprise to the upside, EURUSD broke through 1.10 and advanced to the highest level in a year, while DXY is at its lowest level since last April, which is in line with our dollar weakening view," Barclays notes.
"The recent EURUSD move was in line with US and European data surprises, indeed. The dollar weakness and appreciation in EURUSD materialized earlier than we had anticipated. Equally, however, the macro picture has moved towards our views faster than anticipated. Thus, we see risks tilted towards further dollar weakness, towards our 12m 1.13 EURUSD forecast," Barclays adds.