Deutsche Bank is out with a new set of FX forecasts and has this to say:
"We have been bullish on the USD throughout the year on the premise that the Fed will cut slower than other central banks and that the dollar was under-pricing the US election. The dollar’s rally in recent days is arguably in part due to the market finally starting to price a higher risk premium onthis event. We have now updated our FX forecasts to also incorporate French political developments. The main negative impact is on Europe’s long-term competitiveness and strategic autonomy irrespective of who wins. We see EUR/USD (and many other dollar pairs) staying weak below 1.10 for the next two years and always failing to beat the forward. Our EUR/USD forecasts are highly dependent on the US election and the extent to which an aggressive protectionist trade policy is pursued; if this is the case, we would be likely to revise our EUR/USD forecast closer to parity."
Full forecasts:
