EUR/USD: En-Route To 116: USD/JPY: En-Route To 108 - BNPP

BNP Paribas economists remain of the view that the economic backdrop will remain too uncertain to allow a rise in Fed rates in the short-term, while slower growth later this year will keep it on hold for longer.

"The combination of a weakening risk environment coupled with continued unwind of Fed tightening expectations – US 2y yields are 16.5bp lower than before the Fed – creates a backdrop against which we can see further weakness in the USD vs the G10 current account surplus currencies," BNPP argues. 

"We continue to forecast EURUSD rising to 1.16 and USDJPY falling to 108 by mid-year," BNPP projects. 

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