Currency surprises of 2025: from dollar to ruble

The currency world was in a serious turmoil in 2025, thanks to Donald Trump. The dollar took a surprising tumble, the Argentine peso took a particularly hard hit, and the ruble was one of the year's notable winners.

When the balance sheet is drawn up in two weeks, 2025 will go down in history as the year in which almost the entire currency world was on the wrong foot. Heading into the New Year, almost everything pointed to the dollar's prospects for a good run. The US currency had the wind at its back not only from a widening interest rate differential with Europe, but also from the prospect of Donald Trump entering the White House in mid-January. Trump had already laid out his plans to boost the US economy. But as often happens in the currency world, things turned out very differently than expected.

The currency moment of 2025: Liberation Day
On April 2nd, Trump announced a raft of high import tariffs on the inhabited and uninhabited world: from China to Heard Island, located near Antarctica and inhabited only by a penguin colony. Financial markets were shocked, and stock prices took their biggest hit since the coronavirus pandemic. A few weeks later, Trump had withdrawn or postponed virtually all of his measures. But confidence in the dollar suffered a significant blow. In the two weeks following "Liberation Day," the US Dollar Index fell by 5%, while the Japanese yen and especially the Swiss franc took over the role of safe haven. Later in the year, a falling US interest rate hurt the dollar even more.

The biggest gainer of 2025: Russian ruble
The ruble's strength in 2025 was almost as big a surprise as the dollar's weakness. The Russian currency rose by a whopping 23% against the euro. The vast majority of this increase occurred in the first few months of the year. Despite the rise, the ruble is still 40% lower than it was in the summer of 2022. Because the Russian government has an iron grip on the exchange rate, the rise shouldn't be read too much into it. In that regard, the rise of the Hungarian forint deserves more attention. Like other emerging market currencies, the currency benefited from the falling dollar. Moreover, the Hungarian policy rate remained stable at a high 6,5%, while interest rates in many other countries actually fell slightly.

The biggest faller of 2025: Argentine Peso
The Argentine peso was certainly not the weakest currency of the year for the first time. Expressed in euros, the currency lost 36% of its value. Over the past decade, the depreciation amounts to 99,9%. Despite the economic woes, it remains to be seen whether the peso will also be hit hard next year. The country received $12 billion from the IMF in April to restore economic order. Inflation has fallen from over 100% at the end of last year to 31% last month. If the flamboyant President Javier Milei succeeds in further reducing inflation and truly reviving economic growth, it is likely that the peso will hand over the red lantern of currency status in 2026. The Turkish lira (-27%) may win the race to the bottom for the Argentine currency next year.

Joost Derks

Joost Derks is a currency specialist at iBanFirst. He has over twenty years of experience in the currency world. This column reflects his personal opinion and is not intended as professional (investment) advice.

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