ABN AMRO Investment Solutions
Tariff challenges for Europe may be mitigated by negotiation leverage and currency devaluation against the dollar.
Amundi Investment Institute
We believe a resurgence in US inflation and a spike in interest rate volatility are the only scenarios that would necessitate substantial upside for the dollar from this point. We find it difficult to believe that such a trend can be sustained, and expect the dollar to eventually weaken in 2025.
Bank of America
BofA forecasts a peak in the dollar in the first quarter; to remain strong vs. Asian currencies (end-year forecast for Japanese yen is 160, for Chinese renminbi 7.4), but euro to appreciate to 1.15 by year-end.
BCA Research
We are long the dollar, and are negative toward energy and industrial metals within the commodity complex. We are likely to remain overweight gold until we see significant evidence that central bank purchases are likely to wane. Investors should buy gold on dips.
BNP Paribas
We see further upside for the dollar against the CNY, MXN, CAD, SEK and CEE3 currencies.
BNP Paribas
Given our expectation of widening front-end interest rate spreads, we expect EURUSD to fall to parity in 2025.
Capital Economics
With growth extremely weak and labour market conditions cooling, we think that policymakers in the euro zone will cut interest rates more aggressively than their peers in other major economies. We forecast that the ECB will lower its key policy rate to around 1.5% by the end of 2025. One consequence is that the euro is likely to weaken further: we think it will hit parity against the US dollar next year.
Citi
We expect the dollar rally will continue into the first quarter of 2025, and potentially persist through the first half, bringing the dollar into a new and higher range relative to the past two years. As the year progresses, though, uncertainty will reign, and the range of potential economic (and therefore central bank) outcomes feels wider than in recent years.
Deutsche Bank
In foreign exchange, the highlight is a EURUSD move to parity in 2025, but with a high beta to the uncertain tariff regime, and then to the European policy response which may lift the single currency as we move into 2026.
Franklin Templeton
In foreign exchange markets, the US dollar should continue to appreciate, as investors seek out higher returns in US equities (public and private), US fixed income (given higher US interest rates) and via direct investment.
Goldman Sachs
Long dollar positions should also provide protection against both US rate upside and broadening tariff risks, reinforcing the case for US investors to keep hedging their overseas bonds (and equity) exposures.
HSBC Global Private Banking
While global policy rates are expected to drift down, the US dollar will remain one of the higher yielding currencies, which makes it attractive. The US economy’s outperformance may be another source of support. And as tariffs add to uncertainty in our multi-polar world, the US dollar may continue to see some support from its safe haven status.
Invesco
Dollar will weaken as Fed loosens. Commodities will be supported by accelerating global economy and dollar weakness.
JPMorgan Chase & Co.
We are also positive on the dollar with a call for EURUSD breaking parity (0.99 in the first quarter), we expect CNH to weaken on the back of the tariff shock (7.40 in the first quarter and 7.50 in the second), whereas we expect USDJPY to retrace on the back of a more hawkish BOJ policy than currently priced in (151 in first quarter, 148 in second).
LPL Financial
President-elect Trump’s proposed tariffs could elevate currency market volatility and stoke inflation fears, putting additional upward pressure on the dollar. Based on this backdrop, we believe the dollar will be well-supported in 2025. We expect limited downside risk, while meaningful upside could be capped by the gravitational pull of a less hawkish Fed.
Macquarie
We think this dollar rally still has further to run. There is widespread optimism that tariffs will be rolled out incrementally not explosively, and only after a delay of up to a year — mimicking the playbook used last time. Back then, the dollar enjoyed broad-based strength from 2018-19, and history could well be about to repeat itself.
Macquarie
The yen is likely to be the only exception to the broad-based US dollar strength we anticipate. It should rally even more than the dollar.
Ned Davis Research
We are currently bullish gold. We are neutral on the US dollar, euro, yen and the UK pound.
Pictet Asset Management
In currency markets, we expect the US dollar to overshoot in the near term. With resilient US growth and stalling disinflation, the Fed is unlikely to be able to cut interest rates aggressively. However, we think the dollar is approaching a cyclical and secular peak, under pressure from twin deficits of expanding government spending and current account imbalances, as well as expensive valuation.
Pimco
In foreign exchange, we are somewhat underweight the US dollar as the Fed cuts rates, while diversifying into currencies from both DM and emerging markets.
Robeco
In our base case, bouts of dollar strength may remain, especially if the Fed slows easing and the US economy remains resilient in the second half of 2025 relative to the rest of world. The dollar-yen pair trade tickles our interest, as the discount of the yen on relative purchasing power parity is historical.
Russell Investments
The dollar is expected to face upward pressure from tariffs, the strength of the US economy, and a less dovish Fed compared to other central banks. However, its valuation remains high, and emerging-market currencies have already been under pressure. Given this, we are keeping currency bets in portfolios limited for 2025, while staying alert to any opportunities and risks that may arise throughout the year.
Societe Generale
Japanese growth is looking more robust than expected, while the wage and inflation outlook will probably trigger monetary policy normalization. We remain heavily exposed to the yen (17% in total, although cut by 3 percentage points) based on the monetary policy divergence with the US and Europe, and the massive undervaluation (read: one of the best expected returns). Japanese equities remain a relatively attractive asset, in our view, backed by solid balance sheets and more supportive shareholder-value policies.
TD Securities
The first phase of the new Trump presidency is to introduce global trade uncertainty with the aim of reshaping policy. The first order effect is bullish for the dollar, reflecting the impact global trade tensions and associated tariff jawboning.
UBS
The US dollar is likely to be caught between short-term positive drivers, including tight US labor markets and tariffs, and longer-term negatives, including overvaluation . Investors should use periods of strength to reduce US dollar exposure.
UniCredit
We expect the dollar to shine in 2025. The Trump presidency is likely to lead to higher inflation, a more-cautious stance by the Fed, more trade tensions with China and Europe and more isolationist US foreign policy, which all point to strong demand for the greenback.
Wells Fargo
The US dollar and currency volatility look poised to rise as tariffs, geopolitical risks, US fiscal and immigration policy serve as positive catalysts for continued dollar strength.
Wells Fargo
We expect dollar gains in early 2025 to be concentrated against China-linked, more open economies with larger current account deficits.
Wells Fargo
Havens should enjoy relative near-term support with the Swiss franc and yen benefiting if interest rate differentials do not widen significantly.