Credit Agricole CIB Research discusses its expectations for the USD trading this weeks.
"The key question at the start of the new week is whether the combination of strong US data, higher UST yields and evidence of ranging Covid pandemic outside of the US could also fuel a spike in risk aversion. Our central case remains that the improvement of the global outlook as well as the still very dovish Fed message should help prop up risk sentiment and thus risk-correlated currencies at the margin," CACIB notes.
"We further hope that continuing successes on the vaccination front would help ease the worst of market fears. As a result, we think that higher UST yields this week could support the USD but mainly vs. low-yielders like the EUR. GBP/USD could remain close to the lows as well as investors continue to reassess the appeal of the GBP-denominated assets," CACIB adds.