FXStreet reports that economists at HSBC now abandon their ‘U-shaped’ view and expect USD weakness to persist into 2021.

“Massive monetary and fiscal easing have allowed markets to retain their ‘V-shaped’ recovery mindset, despite renewed waves of COVID-19 in many countries. Expectations for disbursement of a vaccine through 2021 have allowed risk appetite to shrug off the current wave of renewed containment measures. A selectively risk-positive spin on the implications of the US election outcome has also sustained the reflationary theme for 2021.”

“We have chosen to abandon our ‘U-shaped’ view to embrace the market’s enthusiasm for a ‘V-shaped’ recovery, although we do so modestly. It means further broad weakness in the USD rather than divergent prospects for it.”