On the revision, they argue that the dollar is likely to decline further on the back of uncertanties surrounding the US’ fiscal stance.
Adding that the risk of further depreciation in the greenback “should not be neglected, and in the longer term, rising government debt is likely to weigh on the dollar”.
That said, they don’t see profound gains in the currency pair as “European growth remains weak and the ECB is too expansionary to promote a follow-through of EUR/USD to the 1.25-1.30 area for now”.
This just adds to yet another call for a higher EUR/USD, which is already starting to move closer towards the 1.20 level that most firms have been forecasting lately.
As for the bigger picture, just be mindful that the ECB may step in with some verbal intervention if price action does stretch too far considering that it may hinder their efforts to try and get inflation back on track.
But that is a topic left for another time I would say. For now, the consensus continues to shift towards a weaker dollar in general.