Our new interest rate forecasts where the Fed will cut later and to a lesser degree than the ECB are in favour of a smaller USD weakening than we expected previously.

One could easily make the case that the USD should instead strengthen against the Euro and we will not be surprised if that happens periodically. However, we still believe that lower rates globally will continue to support economic activity and risk sentiment, lowering the appeal of the USD, from a safe-haven standpoint. 

Broadly speaking, we see the EUR/USD range locked between 1.0500-1.1000 area over the upcoming year.