US President Donald Trump’s presidency is having a significant impact on global currencies. While investors initially expected the dollar to rise due to tariff uncertainty, it has actually weakened against most developed market currencies, except for Canada.
The euro, Swedish crown, and Japanese yen are among the top performers this year. The euro has surged 5% higher than last year’s best quarter, with a 1.09 dollar value – its highest since the November election. BofA predicts further gains to 1.15 dollars by end-2025.
The yen has gained 6% against the dollar due to higher interest rates in Japan and safe-haven flows during turbulent times. Analysts expect the Bank of Japan to accelerate rate hikes, boosting the yen’s appeal.
Canada’s currency, however, remains volatile, with a 2% risk premium priced into it. Mexico’s peso has also strengthened by 5%, but universal steel tariffs have raised concerns about further instability.
Notably, China’s yuan has defied expectations and strengthened to trade around 7.25 dollars per unit. BofA attributes this to other emerging Asian currencies having strengthened more than the yuan, supporting Chinese exporters.
Sweden’s crown is another surprise performer, rising 9% to near 10 crowns per dollar. Analysts attribute its strong performance to European shares, a Ukrainian-Russia ceasefire, and improved Swedish economic prospects.
Source: https://www.reuters.com/markets/currencies/big-currency-winners-2025-so-far-do-not-include-dollar-2025-03-14