EUR/USD. We are adjusting our EUR/USD forecasts in line with what we communicated before and immediately after Brexit. We now forecast EUR/USD at 1.09 in 1M (1.11 previously), 1.07 (1.10) in 3M, 1.10 (1.14) in 6M and 1.14 (1.18) in 12M. Short-term, we expect increased political uncertainty in the eurozone and the prospects of further monetary easing to weigh on EUR/USD. However, medium-term we continue to expect that the undervaluation of the EUR and the large eurozone-US current account differential will support the EUR.

USD/JPY. We are lowering our USD/JPY forecasts to 105 in 1M (108 previously), 107 in 3M (112), 108 in 6M (112) and 108 in 12M (112). Brexit and our call that the Fed will now be on hold for the rest of 2016 imply that there is less room for USD/JPY to move higher. We continue to expect that BoJ will ease aggressively in July by cutting interest rates by 20bp and to announce additional quantitative easing. In addition, the risks of FX intervention are increasing. Hence, we expect USD/JPY to edge higher on 0-3M and stabilise medium-term.

USD/CAD: We still expect the fundamentally undervalued 'loonie' to gradually appreciate over the coming year on the back of valuation, a gradually higher oil price, markets re-pricing BoC monetary policy and a generally improved growth outlook in North America. On the back of the decline in oil prices and with the outlook of more short-term USD strength we lift our forecast profile to 1.33 in 1M (from 1.31), 1.31 in 3M (1.28), 1.28 in 6M (1.26) and 1.25 in 12M (1.24).