He US dollar could register an increase of at least 5% in 2025according to updated projections of Goldman Sachs. This upward adjustment reflects the expectation of robust economic performance in the United States and more restrictive trade policies under the Donald Trump administration.
This panorama poses significant challenges for other economies, such as Argentina.
Below, we analyze the main reasons behind this forecast and its global implications.
Factors driving dollar appreciation
Resilient economy in the United States
Goldman Sachs highlights that US economic growth continues to be stronger than that of other developed economies. The strong labor market, evidenced by recent employment data, reinforces confidence in the dollar, attracting investors towards assets denominated in the US currency.
Impact of tariffs
President Trump’s proposed trade policies, including new tariffs, could generate inflation in the short term and limit the Federal Reserve’s room to implement looser monetary policy. This would consolidate demand for the dollar as a safe haven.
Review of previous forecasts
This is the second upward adjustment made by Goldman in the last two months. The bank had previously anticipated a more dovish path for the dollar following the Fed’s pivot to lower rates in 2024. However, US economic resilience and tariff expectations reversed this view.
Global repercussions of the strengthening of the dollar
Impact on other currencies
Goldman projects that the euro would fall to 0.97 against the dollar in the next six months, a level not seen since 2022. Likewise, he expects the pound sterling to fall to 1.22while the Australian dollar would reach 0.62 US cents in the same period.
Effects on emerging markets
The strength of the dollar could put pressure on the currencies of emerging economies, such as the Argentine peso and the Mexican peso, by making external financing more expensive and increasing import costs.
Tensions in Asia
The dominance of the dollar also affects Asian currencies, such as the Chinese yuan, which faces greater challenges to stabilize within its fluctuation band. Beijing has implemented additional measures, such as stricter capital controls, to contain the depreciation of the yuan.
Goldman Sachs Outlook to 2025
The financial institution projects that, in addition to a strengthening of the dollar, the superior performance of the United States will continue to tilt the risks towards further appreciation of the currency. This is reflected in the optimism of hedge funds, whose bullish positioning is at levels not seen since 2019.
Source: Ambito
I am Pierce Boyd, a driven and ambitious professional working in the news industry. I have been writing for 24 Hours Worlds for over five years, specializing in sports section coverage. During my tenure at the publication, I have built an impressive portfolio of articles that has earned me a reputation as an experienced journalist and content creator.
