How Forex Investors Trading Currency
Foreign currencies advertise on the windows of Times Square, the top tourist attractions in New York and the United States, on March 28, 2025.
Spencer Platt | NebraskaDailyNews
Strategists told NebraskaDailyNews that the rollout of US President Donald Trump’s tariff regime is weakening sentiment towards the dollar and prompting investors to look for foreign exchange (FX) trade elsewhere.
The dollar index measures the value of green to a basket of major competitors, with little change on Wednesday morning. The U.S. currency began to rise steadily in late 2024, with the currency peaking in mid-January – but the U.S. dollar index in recent weeks has steadily cut some of those earnings.
Historically, this money has been widely regarded as a safe haven asset for investors, given its status as the world’s reserve currency and dominance. International borrowing, payments and transactions. When the dollar strengthens, U.S. exports become more expensive, while imports are cheaper. The value of green back can be Also affects Global monetary policy, capital flows and corporate earnings.
“Currency traders positioning is shifting the dollar to the dollar, and the currencies of major U.S. trading partners are becoming more bullish as the United States prepares for a transnational trade war,” said Joseph Brusuelas, chief economist at RSM US. Published on Monday.
The euro is expected to rise
Brusalas pointed out The euro serves as a signal of “erosion of confidence in the US dollar.”
“From late October to the first week of March, most of the euro positioning is long-term,” he said in his announcement on Monday. “But now for three weeks, the net positioning is euro.”
Jordan Rochester, FICC strategy director and executive director of Remo Bank, told NebraskaDailyNews that his exchange rate against the euro against the dollar continued “a view down.” He believes that by the end of this year, the euro will drop to between $1.06 and $1.07.
“Once we know the details of the tariffs, I hope this market can be priced at ‘maximum pain’ prices,” he said in an email. This has “a chance to take the other side,” he said.
“Once the pricing is fully set, the EU and others (probably) with … their own retaliatory tariffs will lead to subsequent recovery,” he said.
Athanasios Vamvakidis, global head and managing director of Bank of America’s G10 FX strategy, told NebraskaDailyNews that he was in US dollars despite the expected immediate positive impact on Greenback.
“We’re over and we’re still bearish for the whole year,” he said on the phone. “We believe the market is already pricing selective tariffs, but it will receive tariffs in full.”
He told NebraskaDailyNews that the dollar could meet immediately after the charges took effect, but noted that it was “probably an opportunity for sale.”
“Besides the short term, there are two channels that should lead to the dollar weakness,” Vamvakidis explained. “First, when you let the United States compete with the rest of the world in a trade war scenario, then the United States will end up suffering more because… when you compare it to the rest of the world, the rest of the world will be bigger. Secondly, the tariff recommendations are stagnant risks, and now the market is very concerned about such risks.”
Like Brusuelas and Rochester, he predicted that the euro would eventually be driven by Trump’s trade war. Vamvakidis said that while the U.S. argues that a policy combination that could be negative because of its currency, Europe is focusing on “growth-friendly policies.”
“Germany announced a massive fiscal stimulus, Europe announced a large number of defense spending, structural reform plans to focus on growth and competitiveness,” he said. “These plans are plans so far, but we haven’t even (from Germany), from Germany, the weakest-growing economy in the euro zone, the largest economy in the euro zone, and the strictest fiscal policy in the euro zone, which is really a game-changer.”
Vamvakidis said his team believes the euro this year will reach $1.15 and $1.20 in 2026.
Stirling Bull
Bank of America’s Vamvakidis also argues As Trump’s tariff regime takes effect, the pound has a potential rise, noting that the U.S. president is targeting the EU’s tariff threat when he suggests that Britain can be spared.
“In addition, there is also a positive seasonality in April,” he said. “So, in the short term, we should see Sterling perform relatively well. We also like Sterling against the dollar throughout the year. Violations of the euro depend on the implementation of EU reforms.”
In a note in late March, Maybank analysts revised their forecast for the pound upwards, saying they are now seeing Sterling reach $1.26 by the end of the year before rising to $1.31 in early 2026. In early 2026, the UK currency traded at around $1.29, and around $1.29.
“We…are more optimistic about the pound with plans to increase defense spending, maintain fiscal discipline and relax the risk of rigidity,” they said. “We insist that the British will be more resilient in the possibility that the UK, as a service-oriented economy is unlikely to be affected by Trump’s trade politics. As a close ally of the United States, the Trump administration may also be spared from major actions. This is a very uncertain and challenging and challenging external environment.”
Australia, New Zealand currency can be increased
Maybank analysts also predicted By the end of 2024, the New Zealand dollar’s currency is targeting USD 0.58, an increase of 2.1% from current levels.
“A circular bottom is formed for NZDUSD, which indicates further recovery,” Maya Bank analysts said. He added that the outlook for currency remains positive as New Zealand’s economy recovers and the pace of monetary easing may slow down.
“Australia and New Zealand also have stronger balance sheets than most other Western countries, especially with a much lower debt-to-GDP ratio.” Generation of moneysaid by email.
“This means they have more room to realize their potential stimulus, which is another factor that makes them both attractive to investors, which helps strengthen the currency.”
He added that the economies of both countries “have much less connection to the trade war narrative.”
“To address the effects of tariffs, China is looking at stimulus measures to boost its own economy, which is considered a positive measure for both Australian and New Zealand economies, both of which tend to trade surplus with China,” King told NebraskaDailyNews.
(tagstotranslate) Money market
