Saxo Bank believes, that news about COVID-19 vaccine release will cause a weakening dollar
Saxo Bank chief strategist John Hardy said news of the COVID-19 vaccine market launch would trigger a weaker US dollar. The expert notes that he is not sure that the growth of the American currency will continue even in the short term unless the market remains volatile.
"The single currency will benefit if the vaccine from Pfizer and others lives up to expectations, although the gain may be modest as the procyclical ratio is lower than commodity and emerging market currencies," says Hardy.
Also, the chief strategist believes that while the market notes an improvement in economic growth prospects on a global scale, movement is noticeable more likely in the JPY crosses (towards the yen's decline) than in the USDJPY.
As for the GBP, then, according to the Saxo Bank expert, news of a breakthrough in the Brexit negotiations is required, and if the hopes for a vaccine against COVID-19 are justified, then the EUR/GBP pair can quickly advance to 0.8600, and for GBP/USD is a good indicator - 1.3500.
“It's not easy for the Swiss franc as global bond yields are rising and gold is no longer a safe haven. If we defeat COVID-19 and see a good fiscal package in the EU, there may be room for a major upward correction in EUR / CHF. So far, the closest border is the level 1.0900, " Hardy predicts.
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