Nomura on the two main factors that will drive further US dollar strength in 2025

Nomura Securities’ Global FX Strategy team forecasts a potential strengthening of the U.S. dollar in 2025, driven by two main factors:

• persistently high core inflation in the United States, which may hinder the Federal Reserve’s ability to lower interest rates,
• and the tariff policies of President-elect Trump, which could significantly influence economic conditions.

The analysis also highlights expected currency performance trends for the first half of 2025. Underperformers are likely to include the

• South Korean won,
• Thai baht,
• Singapore dollar,
• Swiss franc,
• and Swedish krona,

The Indonesian rupiah,

• Japanese yen,
• and Norwegian krone

are projected to perform relatively better.

Among Nomura’s recommended trades are long positions on

• USD/CNH, targeting 7.60,
• and USD/KRW, targeting 1,500, by the end of May 2025.

This outlook underscores the intricate relationship between global economic policies and currency market dynamics.

This article was written by Eamonn Sheridan at www.forexlive.com.