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 strongerThe 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:
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”.
This may widen the interest rate gap between the US and other regions, supporting further demand for the dollar.
DOWNSIDE RISKS:Despite a strong outlook, the US dollar may face bearish pressures in 2025 from any of these factors:
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:
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.
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:
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:
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.
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.
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:
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%:
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.
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