Societe Generale Research discusses its EUR/USD and USD/JPY outlook for next year.
"We expect EUR/USD to spend 2021 in a 1.20-1.30 range. The establishment of the Recovery Fund helps boost long-term confidence that monetary policy won't be the ‘only game in town' to support growth, and the flow of money into peripheral Euroepan bonds has echoes of 2013 and 2017.
"Abenomics delivered an undervalued yen with the help of negative nominal rates, large-scale asset purchases and yield curve control. Those policies only work if they aren't adopted everywhere. We expect to see USD/JPY below 100 in 2021. And as for sterling, it's only protection is that in real terms it is already very weak given a great deal of pessimism about the outlook for the currency," SocGen adds.