Danske Research sees a scope for further USD upside over the Summer.
"Since the Fed meeting last week, EUR/USD have dropped roughly 3 figures, to around 1.19. Equities are a lens by which one can view this sharp reversal in FX as the reflation trade facing headwinds amid unwinding of momentum. From here, 1) broad equity indices should continue to do well, 2) jobs data should confirm and 3) inflation expectations (5y5y) should not fall too much," Danske notes.
'We expect Fed headlines/speeches to be hawkish over the coming weeks. If so, there is scope for further USD upside after the summer," Danske adds.