Comments from Deutsche bank on the EUR, with comments on how China risk in linked in:
cyclical picture dim on multiple fronts
- trade wars
- Italian risks
DB sees EUR/USD trying to break 1.10 over the summer though not far beyond.
Do not see extended fall for the EUR/USD:
- European balance of payments continues to be “Japanized” with current account recycling decelerating further this year
- Second, the Fed has greater potential to ease policy which should eventually be more negative for the dollar
- Third, the euro is likely to benefit from an unwind of euro funding as well as pricing some “dumping” risk of China assets.
Not sure on 1 but I see their point on 2 and 3.