Societe Generale Research sees a scope for EUR/USD to break above 1.20 by the end of November and for GBP/USD to break above 1.40 by year-end.
"The scope for global recovery is not the same as it was in the early 2000s, but there's nothing here to make us bullish of the dollar unless the Fed makes a very dramatic U-turn. By contrast, although the Us economy will gain comfort, the big growth winners will be in emerging markets (hopefully) and in Europe, where the news has come just as the second wave of the pandemic appears to be peaking out and where growth expectations have been revised down significantly. That's enough to think that EUR/USD will continue to hold above 1.16 support and will probably break the year's high just above 1.20 before the end of the month," SocGen notes.
"One currency which could do very well from vaccine developments, is sterling. But there is, because it's sterling, a major caveat. If the UK and EU can agree a trade deal this week, there's a chance of GBP/USD trading at 1.40 by the New Year as talk of negative rates melts away. ‘If' though, is a poor trading strategy," SocGen adds.