US dollar faces continued pressure in 2025, says deVere CEO

Investing.com -- The US dollar has had a difficult start to the year, with factors causing its decline unlikely to disappear soon. This grim forecast comes from Nigel Green, CEO of deVere Group, a leading independent financial advisory, asset management, and fintech organization. The global reserve currency recently finished its poorest three-week period since September.

Green stated that the factors burdening the dollar, including President Trump’s trade policy, stronger global growth, and political shifts in Europe, will likely persist. This will maintain pressure on the US currency for the foreseeable future. He added that these circumstances present both risks and opportunities for investors.

Under President Trump’s second term, changes in trade policies have not strengthened the dollar. Despite the reintroduction of tariffs in some areas, the broad, immediate tariffs that many investors had anticipated have not yet occurred. This has caught markets off guard. The initial expectation of aggressive trade restrictions had supported the dollar, as investors prepared for disruptions that would push capital towards US assets. However, the administration’s more selective approach has led to a loss of momentum for the dollar, according to Green.

Investors remain cautious. If the Trump administration implements stricter measures, especially against China and the EU, the dollar could recover. Currently, however, the policy environment is applying downward pressure on the currency.

A stronger economic performance outside the US is another key factor negatively affecting the dollar. While the US economy is projected to grow by 2.7% in 2025, other significant economies, such as China and Europe, are demonstrating stronger-than-expected resilience. This is diminishing the dollar’s status as a safe-haven asset.

Green noted that investors are transferring capital from the dollar to higher-yielding global assets, particularly emerging markets. As risk appetite improves, the demand for US currency is falling. If global growth remains steady and the Federal Reserve moves toward easing, the dollar’s downward trend is likely to continue.

Political developments in Europe, which often create instability that benefits the dollar, are currently working against it. Recent election results in Germany have boosted confidence in the Euro, as a coalition between the Christian Democrats and Social Democrats is seen as stabilizing for the region. Additionally, rate cuts by the European Central Bank (ECB) initially weaken the Euro but attract capital away from the US by boosting European assets, reducing dollar demand.

Green explained that a weaker dollar is altering investment opportunities. US exporters will benefit as a softer dollar makes American goods more competitive internationally. Emerging market stocks and bonds are becoming more attractive, especially in economies benefitting from robust global growth. Commodities such as gold and oil tend to rise when the dollar declines, making them key hedges in the current environment. Additionally, Bitcoin and digital assets continue to gain traction as alternatives to traditional fiat currencies, particularly as a hedge against dollar weakness.

With the dollar under sustained pressure, Green advises investors to focus on diversification and opportunities outside the US. He concludes by predicting that the US dollar will remain on its challenging path for the remainder of 2025, and investors should consider the profound implications this may have on their investments.

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