EUR/USD: The US economic context is penalising the dollar says BNP, which expects a rise to 1.16 by mid 2016

According to BNP Paribas, the economic environment will remain too uncertain to allow for an increase in US short rates, while the anticipated economic slowdown later this year should further delay the next Fed rate hikes.

"The combination of a weakening risk environment coupled with the ongoing decline in upward expectations of Fed rates create a context in which we anticipate that the dollar will continue to weaken against the other G10 currencies.

We therefore continue to expect an increase of the EUR/USD to 1.16 by the end of the year."