EUR still supported

When it comes to the EUR all of the above suggests that additional upside risk cannot be excluded, at least in the short-term. This is due to the currency's strong sensitivity to risk sentiment. 

"However, as both a stronger EUR and weaker commodity price developments should have increased downside risks to inflation, ECB President Draghi may well turn more dovish as part of next month's central bank rate announcement. As such monetary policy prospects may become more important anew", says Credit Agricole. 

This is especially true as the latest development should have decreased speculative short positioning considerably. Elsewhere, commodity currencies are likely to stay subject to downside risk. 

"Even if Chinese growth expectations were to stabilize, such prospects would bring the Fed back in focus and it would increase the probability of them considering higher rates ahead of the end of the year. Rising Fed rate expectations to the benefit of the USD should keep commodity price developments capped", added Credit Agricole.