FXStreet reports that economists at HSBC note that the AUD, CAD and NZD have been amongst the best performing G7 currencies so far in Q4 2020 and will continue to capitalize on a ‘V-shaped’ global recovery.

“The AUD, CAD and NZD have been amongst the best performing G7 currencies so far in Q4 2020, with the NZD at the top of the list. Their outperformance against the USD will likely extend into 2021, as the three currencies will capitalize on a ‘V-shaped’ upswing in global economic activity, given their commodity-based personality and positive correlation with risk appetite. However, the CAD may be less well placed than the AUD and NZD, for example, to capitalize on this synchronized upswing theme, barring a surge in oil prices, which is not our base case.”

“While we are wary about high debt levels through the many segments of the Canadian economy, they are likely to manifest as CAD underperformance against the less indebted AUD and NZD, rather than outright CAD weakness against the USD.”

“We expect a better year ahead for the AUD, CAD and NZD against the USD amid an improving global economy, while relative growth prospects and debt profiles should see the CAD underperform the AUD and NZD.”