2025 Outlook: 3 assets to watch

• Resilient US dollar may send EURUSD below parity in 2025
   
• Brent could be dragged down to $65 - lowest since 2H21 - on slowing demand
   
• Can Ripple overtake Ethereum as 2nd largest crypto?

 

Our 2025 global market outlook can be summed up in one phrase: Watch President Trump!

The incoming POTUS, due to take over the White House on January 20th, has already set markets ablaze since the US presidential elections concluded.

There were record highs galore last year, from Bitcoin to US stock indices.

 

This year, we highlight how 3 major assets might be swayed by Trump, along with a host of other factors:

 

1) US DOLLAR INDEX (USDInd): Likely stronger

The US dollar has posted a 7% gain for the year, even touching a 2-year high in the final month of 2024.

Most of those gains (~6%) came since October 2024, driven by expectations surrounding President-elect Trump’s economic policies and their potential impact on the Federal Reserve's (Fed) future actions.

And 2025 is expected to be another year of dollar strength.

Here are 3 main reasons why:

• US Exceptionalism: Trump’s fondness for trade tariffs is expected to negatively weigh down other major economies like Europe and China.
  That could lead to a relative outperformance by the US economy, the world's largest, with such prospects in turn boosting demand for the "buck".
   
• Fewer rate cuts: Sticky inflation may change the pace of the highly anticipated interest rate cuts by the Federal Reserve.
  This may widen the interest rate gap between the US and other regions, supporting further demand for the dollar.
   
• Safe-haven demand: The dollar tends to benefit from rising geopolitical uncertainty, and ongoing issues like US-China trade tensions or heightened conflicts in the Middle East could further strengthen its appeal as a safe-haven asset.

 

DOWNSIDE RISKS:

Despite a strong outlook, the US dollar may face bearish pressures in 2025 from any of these factors:

• a dovish shift by the Fed
• stronger-than-expected recoveries in Europe, China, or/and emerging markets
• easing or not-as-bad-as-feared geopolitical tensions
• unexpectedly slower pace of monetary easing outside of the US

According to Bloomberg's model, the expected trading range for the world's most traded FX pair, EUR/USD, over the next 12 months is between 0.9674 and 1.1475.

 

 

 

2) BRENT OIL: Likely weaker

Brent’s downcast outlook for the new year is based off these 3 factors:

• China’s sluggish economic recovery: The world’s largest importer of crude continues to struggle, even well past the pandemic, which has been negatively affecting the demand for oil. Even if Beijing were to announce more economic stimulus, it may not be enough to fend off the threat from Trump's tariffs.

• OPEC+ supply hike: While OPEC+ has delayed increase in output for 3 months until April 2025 (for now), this increase might be realized in the second quarter of 2025.
  More supplies while demand remains weak (esp. In China), may drag oil prices even lower.
  This might even cause another price war between OPEC+ and US shale producers, last seen at the onset of Covid-19 pandemic in 2020.
   
• “Drill baby drill”: Markets may witness an increase in US oil production under Trump 2.0.
  During his campaign, the President-elect promised to reverse Biden’s environmental policies, paving the way for increased domestic production.

If these 3 bearish factors come to the fore in 2025, that could send Brent to $65 – a price not seen since 2H21.

 

UPSIDE RISKS:

In order for oil prices to see a sustained climb, markets need to see a combo of the following scenarios play out:

• China’s economy makes a stunning recovery
• OPEC+ further delays its output hikes
• Iran’s oil output is placed under further US sanctions
• US supplies are not as forthcoming under President Trump

Ultimately, global demand must recover significantly while oil supplies are kept in check, before oil bulls can charge on and potentially push Brent back above $80

 

 

 

3) RIPPLE (XRP): to become second-biggest crypto after Bitcoin?

XRP absolutely skyrocketed in 2024, surging 238.4% last year, and is currently the fourth-largest cryptocurrency by market capitalization (currently: Bitcoin > Ethereum > Tether > Ripple).

If last year's feat is replicated in 2025, it could prove true rumours of XRP overtaking Ethereum in 2nd place.

It all boils down to whether Trump's public embrace of cryptocurrencies would translate into actual polices, specifically:

• End to SEC lawsuit: Ripple Labs has been battling against the Securities Exchange Commision (SEC), then under Gary Gensler, since 2022.
  However, with Trump’s pick and pro-crypto candidate, Paul Atkins set to take the helm, a swift end to Ripple’s legal troubles could boost the prices of its token.
   
• ETF approval: Optimism for XRP is increasing with the emergence of spot ETF applications.
  Ripple’s CEO, Brad Garlinghouse, has called such a product “inevitable”, while the first applications have already been submitted back in October 2024.
  If approved under the new crypto-friendly SEC boss an XRP ETF could attract institutional and retail investors and boost prices.
   
• Stablecoin: Ripple is also making strides into the stablecoin market, with its RLUSD stablecoin receiving approval from the New York Department of Financial Services just last month (December 2024).
  Greater adoption of RLUSD could directly compete with Tether (currently 3rd largest crypto), while the broadening of Ripple’s appeal in the regulated digital finance sector could translate into another massive annual advance for XRP's prices.

 

DOWNSIDE RISKS:

• Policy delays: However, if President Trump delays his pro-crypto policies or fails to fulfil his commitments, investor confidence could weaken, causing a decline in XRP's price.
   
• Protracted legal woes: Additionally, any unfavourable surprises in Ripple's ongoing legal battles with the SEC could lead to increased regulatory scrutiny, potentially hindering the token's growth.

 

And Ripple has already kicked off 2025 with a bang!

At the time of writing, just two trading days into the new year, its year-to-date gains are already into the double digits: up 13%.

Can Ripple do it - become the 2nd largest crypto?

At the time of writing, XRP's market cap stands at US$135.2 billion, which is about one-third of ETH's market cap of US$411.46 billion, using CoinGEcko data.

In order for XRP to overtake ETH to claim the title as "2nd largest crypto", it needs to secure a further 200% gain for 2025.

And that's assuming that Ethereum's price doesn't rise at all from current levels.

While an annual tripling in value would be virtually impossible for most other assets, it's not so unusual for XRP.

Over the past 4 years, Ripple has already TWICE posted annual gains exceeding 200%: 

• 2021: +268.3%
   
• 2024: +238.4%

But for this crypto, only founded in 2012, to fulfil such lofty expectations ...

XRP has to post multiple record highs and ultimately reach $7.11.

 

 

 

In summary ...

While 2025 promises to be yet another exciting year for traders and investors, prudent risk management is still a must-have while searching for potential market opportunities.

Also, one cannot yet rule out unexpected shocks to the markets, which could derail even the most well thought-out plans.

Overall, navigating 2025 will require both vigilance and agility—because in markets, as in life, fortune favours the prepared.

 

 

2025 Donald Trump Dollar index EURUSD Brent Oil Ripple crypto