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Key Wall Street Predictions for the U.S. Dollar in 2025

Key Wall Street Predictions for the U.S. Dollar in 2025: The rise in the value of the U.S. dollar against other currencies seems evident.
Considering all influencing factors, “Wall Street” anticipates further growth
for the greenback in the near term as President-elect Donald Trump’s policies come into effect.
Additionally, several institutions speculate that the dollar might reach parity with the euro.

 

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Predictions

 

 

 

 

American banks and companies 2025 dollar forecasts, per Bloomberg

 

Bank of America

The bank predicts that the dollar will reach its peak in the first quarter
of the year and continue to rise against Asian currencies.
End-of-year forecasts suggest that the dollar might reach 160 yen against the Japanese yen
and 7.4 yuan against the Chinese yuan.
However, the euro exchange rate is expected to climb to $1.15 by year-end.

 

 

BNP Paribas

The bank expects the euro to decline to parity with the dollar in 2025
due to widening short-term interest rate differentials.
Additionally, it foresees further gains for the dollar against the Chinese yuan (used in local transactions),
the Mexican peso, the Canadian dollar,
and currencies in Central and Eastern Europe, such as the Polish zloty, Czech koruna, and Hungarian forint.

 

Capital Economics

With weak growth and declining labor market conditions in the Eurozone,
the European Central Bank is expected to cut interest rates to approximately 1.5% by year-end.
This will weaken the euro further, bringing it to parity with the dollar.

 

J.P. Morgan

The bank predicts that the dollar will surpass parity with the euro,
reaching $0.99 during the first quarter.
The yuan is expected to depreciate to 7.40 yuan in Q1 and 7.50 yuan in Q2.
Meanwhile, due to the Bank of Japan’s tightening policies,
the dollar may decline against the yen, reaching 151 yen in Q1 and 148 yen in Q2.

 

LPL Financial

President Trump’s proposed tariffs will likely increase currency market volatility,
adding upward pressure on the dollar.

 

Macquarie

The bank foresees continued dollar strength,
with a potential delay in tariff implementation for up to a year.
However, the yen might be an exception, as it is expected to rise faster than the dollar.

 

Société Générale

The bank expects Japan’s economic growth and tighter monetary
policies to enhance the yen’s attractiveness compared to the dollar.

 

 

 

 

 

UniCredit

Trump’s policies are likely to increase inflation, supporting the dollar.
However, trade tensions might lead to significant fluctuations.

 

Wells Fargo

The bank anticipates Geopolitical risks, and U.S. fiscal policies are expected to strengthen the dollar.

 

BCA Research

The bank anticipates falling energy prices will bolster gold while the dollar remains strong in the short term.

 

Franklin Templeton

The bank points to higher returns from U.S. stocks
and fixed-income instruments as key factors driving the dollar’s attractiveness.

 

Goldman Sachs

The bank views the dollar as a haven for investors amid rising interest rates and escalating trade risks.

 

HSBC Global Private Banking

According to the Bank, The dollar is expected to maintain its appeal
due to high yields despite uncertainty stemming from tariffs.

 

 

Ned Davis Research

Currently, the bank expects gold prices to rise,
with no significant changes anticipated for the dollar, euro, yen, or pound sterling.

 

Robeco

The bank foresees the dollar’s continued ascent,
The yen has gained some ground due to its undervaluation.

 

Citigroup

The bank anticipated that The dollar is expected to rise in the first half of the year,
but uncertainty will likely increase as the year progresses.

 

Deutsche Bank

The bank predicts the euro-dollar exchange rate could reach parity in 2025, with gradual gains expected in 2026.

 

Invesco

The dollar is projected to weaken long-term as interest rates decline.

 

PIMCO

The bank plans to diversify investments away from the dollar in favor of emerging market currencies.

 

Russell Investments

While the dollar is likely to remain strong, the bank warns of the risks associated with high valuations.

 

 

Key Wall Street Predictions for the U.S. Dollar in 2025

The Dollar eases as the gold prices rebound

 

The dollar eases as the gold prices rebound; gold prices regained some ground on Friday as a slight pullback in the dollar helped alleviate some pressure from the U.S. Federal Reserve’s hawkish policy narrative.

 

Topics
What to expect from gold
Volatile but Profitable
What is the Fed’s perspective on interest rates?

 

 

 

 

What to expect from gold?

 

The Fed’s minutes from its March meeting, released on Thursday,
showed that policymakers were unanimous in their decision to raise rates and several members saw the need for additional rate hikes this year.
The strong data has bolstered expectations for another rate hike in June,
which would be the third this year.

The rise in gold prices came despite a strong rally in equity markets,
which have been boosted by robust corporate earnings and economic data of late. Gold is often seen as a safe haven asset during times of market turmoil or geopolitical uncertainty but has been under pressure recently as investor risk appetite remains high.

Looking ahead, gold prices may continue to see volatility as investors
digest more corporate earnings reports and await further clues on
monetary policy from central banks around the world.

The most recent data shows that gold is up 0.6%,
but this is still below the high of $1,700 per ounce that was seen just a few weeks ago.
While some believe that there may be more upside potential in gold prices,
others are concerned that the market could correct lower in the near term.
Either way, it looks like traders and investors will continue to closely
watch spot gold prices for any clues about where the market may be headed next.

 

 

 

 

Volatile but Profitable

 

Gold prices have been on a roller coaster ride in recent months,
testing the nerves of even the most experienced investors.
After reaching record highs in August, gold prices began to tumble,
and many experts believe that we are not out of the woods yet.

However, there are signs that gold may be beginning to stabilise.
Clifford Bennett, chief economist at ACY Securities believes that the
Fed’s recent interest rate hike and pledge to keep fighting inflation will help
to support gold prices in the short term.
Reuters technical analyst Wang Tao also believes that spot gold may bounce
back to $1,648 per ounce after breaking resistance at $1,632.

While it remains to be seen where gold prices will head next,
it is clear that they continue to be a volatile and risky investment.
However, for investors who are willing to take on some risk,
gold could still offer some profitable opportunities in the months ahead.

 

What is the Fed’s perspective on interest rates?

 

When it comes to investing in gold, there are pros and cons to consider.
On one hand, gold is often seen as a hedge against inflation.
This means that if the cost of living goes up, the value of your investment in gold should also go up.
However, on the other hand, high-interest rates can make it less attractive
to invest in gold since it doesn’t offer any yield itself. So what’s an investor to do?

It really depends on your individual goals and risk tolerance.
If you’re looking for stability and want to protect yourself against inflation,
then investing in gold may be a good option for you.
However, if you’re more interested in potential returns and are willing to take on more risk,
then there may be better options out there for you.
Ultimately, it’s important to do your own research and figure out what makes sense for you personally.

With the release of the U.S. non-farm payrolls data looming,
investors are closely watching for any clues on the Federal Reserve’s rate-hike stance.
A strong jobs report could reinforce the Fed’s hawkish posture and keep gold prices under pressure,
while a weaker report could provide some support for bullion.

The labour market is one of the most important indicators of economic health.
A strong labour market indicates that businesses are hiring and consumers have disposable income to spend.
The payroll data is closely watched by traders and investors because it provides a snapshot of the labour market.

A deceleration in job growth would be seen as a negative sign for the economy and could lead to lower interest rates.
This would be bullish for gold, as lower interest rates make gold more attractive as an investment.
However, if we see an upside surprise in the payroll data,
it would reinforce the Fed’s higher terminal rate posture and keep gold prices under pressure.