FX.co ★ Dollar, farewell: currencies worth betting on in 2025

Euro

Recently, the euro climbed to its highest level against the US dollar since November 2024, reaching $1.09. Since the start of the year, it has gained 5%, marking its strongest quarterly performance since 2022. The main driver behind the euro's rally was Germany’s historic decision to increase spending on defense and infrastructure, which boosted investor confidence in the European economy and fundamentally reshaped the outlook for EUR/USD. Analysts at Bank of America are betting on the euro’s growth. They expect the euro to rise to 1.15 against the dollar by late 2025.

Japanese yen

Since the beginning of 2025, the yen has strengthened by over 6% against the US dollar, recently hitting a five-month high at 146.53. The rally has been fueled by market expectations of further rate hikes from the Bank of Japan, along with the yen’s status as a safe-haven asset amid global uncertainty. Investors increasingly view it as a stable refuge in the face of trade wars and political turbulence in the US. Morgan Stanley economists analysts expect the yen’s further rise, potentially reaching 145.00 versus the dollar in the coming months.

Mexican peso

In March, the Mexican peso advanced by nearly 5% from February’s three-year lows. The key catalyst was President Trump’s decision to delay the imposition of 25% tariffs on Mexican imports until April 2. Experts believe that if Trump continues to postpone or ultimately cancels these tariffs, the peso could strengthen further, especially as Mexico’s central bank is likely to maintain high interest rates to curb inflation, while the Federal Reserve may go ahead with monetary easing.

Chinese yuan

In 2025, the yuan strengthened to 7.25 per dollar, despite some analysts predicting that Beijing would allow its tightly managed currency to weaken in response to US tariffs, as it did during the trade wars of 2018–2019. Instead, China’s authorities have opted for stability, maintaining the yuan’s value despite external pressures. As a result, many analysts now expect the People’s Bank of China to keep the currency within a “comfort zone,” in line with domestic economic priorities.

Swedish krona

The Swedish krona has rallied 9% against the US dollar since the start of the year, reaching 10 per dollar — its strongest level since late 2023. The krona’s strength has been supported by solid European stock market performance, hopes for de-escalation in the Russia–Ukraine conflict, and improving economic prospects in Sweden. The country is also benefiting from growth in the defense sector, where it has a particularly strong presence. Analysts believe these factors will continue to support the krona going forward.