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Major economies continue to struggle with the lockdowns due to Corvid-19. What has been the impact on the G10 currency pairs?

Here is their view, courtesy of eFXdata:

Credit Agricole CIB Research discusses  the impact of relative strictness of lockdowns on G10 pairs.  

“With the risk of some G10 countries going back into lockdown amid outbreaks of Covid-19, we use the lockdown stringency index developed by the Blavatnik School of Government together with our FAST FX model to gauge the impact of lockdowns on G10 FX,” CACIB notes.

We find that the relative strictness of lockdowns matters for EUR/USD and EUR/SEK, but has had little impact on USD/JPY, AUD/USD, EUR/GBP, EUR/NOK and USD/CAD.  While the EZ went into a stricter lockdown earlier than the US, this has allowed it to begin easing restrictions earlier than the US, which in part explains EUR/USD’s recent strong performance,” CACIB adds.

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