Most G10 currencies have risen against the dollar over this period, led by the Swiss franc, which is up by over 5%, while the only loser against the dollar over this period has been the yen over the past time.

Within the G10 currency space, the COVID period (if we start from the beginning of 2020) has not seen huge currency movement. The dollar, on the DXY index, for instance, is only about 2% lower today than in the early days of COVID. Most G10 currencies have risen against the dollar over this period, led by the Swiss franc, which is up by over 5%, while the only loser against the dollar over this period has been the yen, which has shed just over 5% against the dollar. But are we to think that a move into a post-COVID period will see these trends reverse?

One way to think about the outlook is to consider the economic and financial investment trends that will dominate as the world shakes off COVID. Mr. Steve Barrow, Head of Standard Bank G10 Strategy, said there will be some prospective trends on this score. More robust growth could mean strength in commodity prices. Tourism will undoubtedly pick up, and the strength in house prices in many countries could suck foreign investors in. The post-COVID world will see tighter monetary policy, as is already starting to happen. Tighter policy will likely depress returns from financial investments, with bond yields rising and dividend yields falling as well as the rampant rise in equity prices slowing or even reversing.

All of these things, and many more, could have a considerable bearing on the post-COVID currency situation. Straight away, we can see potential winners and losers. If commodity prices climb, particularly energy, then currencies such as the Canadian dollar and Norwegian krone should rise, while the currencies of countries that are hefty oil importers, like Japan and the eurozone, could suffer. The dollar, presumably, will be more bullish, but the big winners will be those countries where energy truly dominates, such as Norway.On tourism, we suspect it might be smaller countries that gain the most, given that tourism flows are often a higher proportion of GDP than large countries. One country that immediately springs to mind on this basis is New Zealand, and perhaps even Australia. Countries that have held a tighter border policy through the crisis, like these two, might gain the most as borders reopen and confidence amongst travellers increases again. We have also noted housing. While house prices have risen as a result of the pandemic, we may find that easing travel restrictions and increased confidence among travelers will boost overseas real estate investment, which could be beneficial to currencies if it brings in large amounts of capital.The low level of real rates in G10 countries could also contribute to stronger international real estate flows going forward. Sorting out who might be the winners and losers from any such flows is a little harder depending on how we describe the attractiveness of real estate investment. One simple way is to look at house prices relative to rental income, with a low ratio here perhaps more likely to attract international investment. On this score, the UK and much of the euro zone look pretty good, while, on the flip side, seemingly less attractive markets lie in the US, Canada, and New Zealand.

"While we’ve barely scratched the surface of this issue, we do seem to be coming to the conclusion that currencies that have not performed particularly well during the COVID era, like the yen and the dollar, don’t seem set to reap rewards in the post-COVID landscape. Instead, currencies such as the Canadian dollar, Australian dollar, NZ dollar, and Norwegian krone might just be the ones to benefit the most", Mr. Steve Barrow said.