Credit Agricole CIB Research discusses the current market conditions in G10.
"The highly-vaccinated UK is an important test of the ‘living with Covid’ paradigm. Fifty-three per cent of the population is fully vaccinated, and many more have antibodies due to earlier infection. FX markets are closely tracking infection rates in the UK and elsewhere, which have been on the rise – bad news for the GBP as well as cyclical currencies, but good news for the JPY and to a lesser extent the USD," CACIB notes.
"It is also important to track hospitalisation rates in the UK, which is a test of the ‘living with Covid’ paradigm. If the UK can open up without a large spike in hospitalisations, it would give other countries hope that vaccinations are a path out of Covid lockdowns," CACIB adds.