2025 Currency Outlook: The New World (Dis)Order
Corpay Cross-Border Solutions
Powering cross-border payments and currency risk management, seamlessly
Read the 2025 Currency Outlook from Corpay Currency Research
As 2024 draws to a close, the world is enjoying a moment of relative stability. Economic growth is holding up, cross-asset volatility has subsided, asset prices are high, and measures of financial stress remain low.
The US economy is demonstrating remarkable resilience—defying expectations for a rate-induced slowdown—and the dollar is poised for a promising start to 2025, buoyed by a relatively hawkish Federal Reserve. This might not last. Starting conditions suggest that momentum is already fading, good news may be largely priced in, and the incoming administration’s tariff, immigration, and fiscal stimulus plans look set to interact in ways that eventually complicate interest rate expectations, weakening the greenback’s outperformance. Other countries, buffeted by leadership changes and external trade threats, could respond with dramatic growth-enhancing policy pivots.
Although it's impossible to know for sure, it seems likely that a very different set of fundamentals will confront currency markets by the middle of next year as 2024’s political upheaval translates into seismic changes in the economic order. We expect global growth to remain broadly positive, but see exchange rates moving in non-linear ways, think that volatility episodes will come in clusters, and believe that the distribution of potential outcomes will widen, with “fat tails” re-emerging as a critical feature of the global financial system.