CNY devaluation to effect European currencies against USD

Despite lower direct economic linkages, the change in China's exchange rate and growth risks are expected to also weaken European currencies versus the USD. 

A combination of slower global growth, lower energy and imported goods prices, and still poorly anchored inflation expectations may force the ECB to extend the QE program beyond September 2016. 

"EUR/USD is seen trading at 0.98 by year-end, and toward 0.93 by end H1 16. Combined with all other forecasts, we see the EUR REER weakening another 10%. The EUR is only currently 6.7% cheap to fair at the moment (1 standard deviation). Based on this view, we continue to recommend being short EUR/USD and long USD/CHF", says Barclays.