Copy article

What currencies will outperform in 2025 and why?

ended 01. December 2024

It's that time of the year when journalists write stories giving experts' predictions for the year ahead. This one is going to be about currencies. So: which currencies do you think will outperform in 2025 and which could come under pressure — and why? Will the greenback go ballistic when Trump's back in the Oval Office and could the Euro feel the pinch? Will the embattled Rouble see further falls and what will happen to the Chinese Yuan when the tarfiff man is in office? Any thoughts, send them across.

2 responses from the Newspage community

Copy all

Copy

Editor
Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
As the world braces for Trump's return to the Oval Office, 2025 could usher in the mother of all currency wars, with trade tensions threatening to ignite global markets. The combination of fiscal stimulus, protectionist measures, and a cautious Fed could see dollar dominance 2.0 on the horizon, with the greenback, once again, set to flex its muscles, potentially reaching multi-year highs. The euro is set to bear the brunt of Trump's trade policies, with the ECB likely to respond with dovish monetary measures, leading to the euro potentially flirting with parity against the dollar by the end of 2025. However, all eyes will be on the Chinese yuan next year, with the currency's fate hanging in the balance between domestic economic pressures and the looming spectre of renewed trade battles. As geopolitical tensions and trade frictions increase, central banks will be forced to navigate treacherous waters, with diverging global monetary policy likely exacerbating currency movements.
Copy

Editor
Tony Redondo
Founder at Cosmos Currency Exchange
Trump’s tariff threats signal a volatile currency market in 2025. The US Dollar is expected to strengthen as Trump returns to the Oval Office, driven by protectionist policies that may raise inflation and keep interest rates stable together with the outperformance of the US economy. The Bank of England is likely to be cautious with rate cuts, supporting the Pound Sterling.

Conversely, the Chinese Yuan could weaken under new tariffs targeting China, while the Euro may face pressure due to political paralysis in Germany and France and a more aggressive easing policy from the European Central Bank.
The Russian Rouble is likely to depreciate further due to ongoing sanctions and rising economic instability as Putin’s government eats through the country’s capital reserves.

Overall, geopolitical tensions and trade policies will significantly influence currency performance in 2025, with the USD benefiting from its safe-haven status amid uncertainty.