The dollar will continue to appreciate in 2025, and it is not excluded that it will reach parity with the euro, the Financial Times (FT) newspaper predicted in its material, citing analysts and investors from Wall Street.
Since the beginning of October, the US currency has appreciated by 6.1%, marking its best quarter since the start of the Federal Reserve's (Fed) campaign to raise interest rates in 2022. The dollar's rise is linked to hopes that Donald Trump will introduce large-scale trade tariffs and implement financial reforms after his return to the White House in January.
More than half of all major banks surveyed by the FT, including Goldman Sachs, Morgan Stanley and UBS, predict that "the dollar will rise again next year". Deutsche Bank expects it to "reach parity with the euro in 2025", the publication said.
Franklin Templeton Fixed Income chief investment officer Sonal Desai said that the idea of a weaker currency under Trump, despite all his rhetoric, is "something like pie in the sky". "Most of the policies he's talked about so far will actually be positive for the dollar," she added.
As the publication recalls, Trump has long believed that a strong dollar is putting "undue pressure" on the US economy. "We have a big currency problem," he told the American business magazine Bloomberg Businessweek in July, referring to the strength of the dollar against the yen and the yuan. "It's a huge burden on our companies trying to sell tractors and other products [in foreign markets]," Trump added.
"Trump's policies are definitely positive for the dollar," said Ajay Rajadhyaksha, head of global research at Barclays. He estimates the dollar will strengthen to $1.04 against the euro by the end of next year.