The Euro-to-Dollar rate was consolidating a recovery of its 200-day average Tuesday having declined to back off from 1.19 amid increasing signs that it has bottomed out, some of which prompted Goldman Sachs to warn that risks to the bank's bullish forecasts are now shifting to the upside.

The Euro-Dollar rate has been range-trading since January's near-unravelling below the landmark 1.20 level but could break in either direction over the coming months, according to BofA Global Research and ING, whose forecasts tell a story of competing scenarios for 2021 outcomes from here. 

The Pound-to-Dollar rate fell amid a widespread rebound in U.S. exchange rates on Tuesday, although upgraded forecasts from ING suggest substantial further upside ahead later in 2021 as its post-referendum undervaluation fades, which is seen lifting GBP/USD back above 1.50 before year-end. 

The New Zealand Dollar was a laggard Thursday but remained the comeback currency of the final-quarter, if-not year overall, and is widely forecast to extend its recovery in 2021 even if an ever-watchful Reserve Bank of New Zealand (RBNZ) does again constrain the pace of its appreciation. 

The Euro staggered and stumbled to the bottom of the major currency barrel ahead of the New Year but remained one of the better performers for 2020 on Thursday, and was still widely viewed as a likely prominent beneficiary of a further anticipated decline of the U.S. Dollar in 2021. 

The Rand's recovery slowed this week as a resurgent coronavirus threatened to deal a final quarter setback to an already vulnerable economy that has a debt burden which was already expected to impede further gains for the South African currency in the year ahead.

The Dollar was down and out for the count against all major currencies Thursday in an ominous sign of what many to come in the year ahead, according to a range of analyst forecast, many of which envisage the U.S. currency as the big loser from a great, global economic recovery in 2021. 

The Pound-to-New Zealand Dollar exchange rate was testing a cluster of major support levels on Wednesday and could break to new 2020 lows if they're overcome, although such an outcome might require a catalyst that further undermines appetite for either Sterling or the Kiwi.

The Pound will suffer steep losses against the Euro and Dollar over the next three months, according to ING Group, because Prime Minister Theresa May's latest "Brextension" is likely to derail the Bank of England (BoE) from its rate hiking path and store up further political upset for later in the year.

The Pound-to-Dollar exchange rate could well reach 1.40 by the end of the year, says ING, in what might appear to be a bold forecast for the pair considering the pair's recent decline below 1.30 over the past 24 hours.

The Pound is headed back toward its post-referendum lows over the coming months, according to analysts at ING Group who have downgraded their forecasts for the UK currency over near-term timeframes.

"Curb Your Enthusiasm for the Dollar," says Dutch lender ING, as its positive drivers are only temporary.

Strategists at ING Group and MUFG are the latest to revisit their 2018 FX forecasts after a Sterling start to the year, while the team at CIBC Capital Markets are warning of volatility and downside risks ahead. 

Pound Sterling could recover much of its Brexit-related losses against the Dollar and Euro in 2018, according to strategists at ING Group, who say recent events have marked a turning point for the currency.

Political and budget challenges could mean 2018 is another tough year for the Rand which could allow GBP/ZAR to break above 20.00.

A cinematic death of Eurozone breakup risk, the second leg of ECB tapering and speculation of an interest rate rise could all drive the Euro higher in 2018.

There is the real chance Pound Sterling might recover this week if markets see the challenge to Theresa May’s leadership fading as one analyst tells us the removal of Boris Johnson from cabinet would be seen as providing further upside impetus.

Should current gains extend above 1.11, a fall to parity in the GBP/EUR exchange rate becomes increasingly unlikely.

Central banks are likely to set the tone for both the British Pound and Euro over coming weeks, and according to one analyst, this offers the GBP/EUR exchange rate potential relief.

The Pound and Euro are unlikely to reach parity in value argue analysts at ING Bank N.V. who say the Pound has become “an easy target for currency markets.”