For all the concerns about the EU breaking apart, analysts say the euro should eventually strengthen as the trade bloc solidifies economically and politically.
"The EUR is close to a turning point, amid accelerating inflation and stronger economic data," Andres Jaime, global FX and rates strategist at Barclays, said in an email. Although many threats still exist, he said the currency is likely on the upswing after "excessive pricing of political risk for 2017."
Jaime expects the euro to dip at the end of this year to $1.03 before recovering to $1.05 by the first quarter of next year.
Euro-USD 12-month performance
Other forecasts see even more strength. Societe Generale expects the euro to rise from $1.07 in June to $1.11 in December.
The estimates contradict analysts' previous forecasts for euro parity with the U.S. dollar, or a one-to-one relationship. Many traders have been on edge about whether growing populist sentiment can keep the EU together past key elections in France and Germany this year.
But as macro strategists see the developing situation, "at the end of the day, we might have one of the strongest French-German axis" in history, Philippe Ithurbide, global head of research, analysis and strategy at Amundi Asset Management, told CNBC in an interview in Paris last week.
In France, anti-EU candidate Marine Le Pen still ties with centrist Emmanuel Macron in leading the polls for the first election round, but Macron is expected to win by a greater margin in the second round. Meanwhile in Germany, pro-Europe candidates lead the polls for the September chancellor election: Angela Merkel faces former European Parliament President Martin Schulz.