From Barclays Capital weekly FX client note, views on USD, JPY and EUR. This via eFX

"Last week saw a significant improvement in global risk sentiment, benefitting risky assets, despite soft data prints and cautious central bank rhetoric (Figures 1 and 2). However, we think the market is likely heading into an environment of lower growth, soft inflation and additional policy stimulus.

Central bank rhetoric is starting to reflect this new reality. The September FOMC minutes showed that the decision not to hike was not a close call, though some FOMC participants had described it as such.. At the same time, the ECB highlighted downside risks to euro area growth and inflation while the BoE also erred on the side of caution," Barclays argues.

In such a lower growth/soft inflation environment, Barclays continues to see value in owning the USD due to the currency's superior returns to capital and safe-haven characteristics.

"A China-led EM slowdown remains a real risk for markets, and we continue to think that the relative closeness of the US economy partially insulates it.

As a result, we think the USD's recent underperformance, partly reflecting softer economic data and a cautious Fed, and partly positioning adjustments, will likely prove temporary. Instead, we continue to argue that the recent tightening of monetary and financial conditions in countries in need of further stimulus pose clear challenges for their growth and inflation outlooks," Barclays adds.

As a result, Barclays continues to expect further policy stimulus by many central banks.

"We look for the ECB to announce further easing before year-end and have frontloaded our call for additional BoJ easing at its 30 October meeting," Barclays projects.

"Strategically, we like being long USD heading into those central bank meetings," Barclays advises.

In line with this view, Barclays maintains a short EUR/USD position in its portfolio from 1.1278, with a stop at 1.1562, and a targets at 1.0460.