Forex ForexMart's Forex News

The dollar's share in world reserves has updated its 30-year low

The dollar's share of global foreign exchange reserves in the third quarter reached its lowest level in almost 30 years.

According to the International Monetary Fund (IMF), the indicator decreased by 0.85 percentage points, amounting to 57.4%. This is the lowest value since 1995, as there are no earlier statistics.

The decrease in the dollar's share is due to an increase in investments in euros: its share increased to 20.02% from 19.75% in the second quarter.

Investments in the Japanese yen and non-foreign currencies also increased, reaching 5.82% and 4.46%, respectively. For the yen, this was the highest since the end of March 2021.

The Swiss franc, like the dollar, reduced its share of reserves to 0.17%, which was the lowest since the end of 2021.

On the contrary, interest in the yuan began to recover: after nine quarters of decline, its share in reserves increased to 2.17% in the third quarter of 2025.
More news on our website: https://bit.ly/4a81506

 

What awaits the U.S. economy in 2025?

The U.S. economy enters 2025 with positive forecasts, despite the risks associated with high interest rates, a possible weakening of the labor market and political instability.

Consumption remains steady, corporate profits are growing, and businesses are investing in technology and preparing for the AI revolution.

According to forecasts, GDP growth in 2025 will be 2.5%, which is only slightly below the level of 2024. The S&P 500 index is also expected to grow by 12% due to successful corporate performance.

However, challenges remain: the labor market is showing a slowdown in hiring, and the number of long-term unemployed is increasing. The Fed raised its inflation forecast to 2.5% for 2025 and is likely to limit further rate cuts, which will put pressure on corporate and government debt.

Investments in equipment and technology continue to grow, which supports economic dynamics. Nevertheless, Donald Trump's program, which includes tariffs and reforms, may pose risks to inflation and market stability in the long term.

In general, experts remain optimistic: consumption, business investment and technological innovation will be the drivers of growth.
More news on our website: https://bit.ly/4a81506

 

Oil continues to rise in price after rising the day before

Oil prices continue to rise, reaching their highest levels since October. Brent futures for March delivery rose to $77.85 per barrel.

The day before, this grade rose by $0.75 (+1%), closing at $77.05. WTI futures for February delivery added $0.41 (+0.55%) and reached $74.66 per barrel, after rising by $0.69 (+0.9%) a day earlier. Both brands ended the previous session at their highest levels since October.

Growth factors:

-Seasonal demand. The good travel figures during the holiday period supported the optimism.
-Chinese incentives. Expectations of economic support in China are pushing the quotes up.

Inventory data:

The American Petroleum Institute (API) reported a decrease in oil reserves in the United States by 4 million barrels per week, which was the fifth decline in a row. If the official data of the Ministry of Energy confirms this assessment, it will strengthen the market. Analysts predict a decrease in stocks by 250 thousand barrels.
More news on our website: https://bit.ly/4a81506

 

The Fed expects further interest rate cuts in 2025

Christopher Waller, a member of the Fed's Board of Governors, expressed confidence that inflation in the United States will continue to decline in 2025, which will create conditions for further interest rate cuts.

Although inflation remained above the Fed's 2% target at the end of 2024, market estimates and short-term indicators point to a slowing trend.

At an OECD event in Paris, Waller stressed that further rate cuts would be possible with a steady decline in inflation and stability in the labor market. He noted that the Fed has already cut the key rate by 1 percentage point over the last three meetings, but at the next meeting in January, the rate is expected to remain in the range of 4.25-4.5%. According to him, opinions within the Fed are divided: from assumptions about the absence of a rate cut to expectations of a reduction of 1.25 percentage points in 2025.

Waller added that the U.S. economy remains strong, with rising hiring and wages supporting consumer spending. New data on the labor market, which will be published in the coming days, may confirm this stability.
More news on our website: https://bit.ly/4a81506

 

The pound continues to fall

The British pound continues to lose ground, showing a noticeable lag behind the trajectory of UK government bond yields. Deutsche Bank analysts recommend selling the pound based on data from a broad trade-weighted index.

The current quote of the GBP/USD pair is 1.2213. Today, the currency has plummeted from 1.2318. Analysts note that since the beginning of the year, the pound sterling has shown the worst results among world currencies, comparable to the decline recorded after the announcement of the UK budget in November last year.

In its analysis, Deutsche Bank points to no signs of improvement in the country's current account deficit, as well as the risk of further deterioration in volatility-adjusted yields.

The bank's report pays special attention to the dependence of the pound on capital inflows through the carry trade, which is now under threat. After taking profits on long positions in December, Deutsche Bank analysts revised their strategy and switched to selling recommendations.

Since the beginning of the year, the pound has lost just over 1% in the trade-weighted index. Although this has not historically been a significant decline, the recent weakness of the pound is particularly noticeable against the backdrop of the strengthening US dollar, against which most world currencies have reached multi-month or even multi-year lows.

 

A strong US economy strengthens the dollar to a two-year high

On Monday, the US dollar strengthened, forcing other currencies to reach multi-year lows. Its growth was supported by strong employment data, confirming the resilience of the US economy and complicating the prospects for a Fed rate cut.

The dollar index, reflecting its exchange rate against a basket of currencies, reached 110.17, the highest in more than two years. This happened against the background of Friday's statistics, which showed an acceleration in job creation in December and a decrease in unemployment to 4.1%. These data have dampened expectations for a rate cut, and markets are now ruling out the possibility of even one cut in 2025.

The publication of US inflation data on Wednesday could further strengthen the dollar if the CPI rises. Statements from the Fed's representatives are also expected this week, which may clarify their further actions.

The US economy is demonstrating resilience, which supports a high dollar exchange rate. According to analysts, the labor market has coped with any signs of weakness. Plans for import tariffs, tax cuts, and tougher immigration may also have an impact on inflation.

The euro fell to $1.0177, reaching its lowest level since November 2022, while the pound sterling fell 0.7%, dropping to a 14-month low of $1.21.
More news on our website: https://bit.ly/4a81506