Latest Market Moves in the Foreign Currency Market - March 24th 2025

US Dollar Weakness Raises Concerns for Investors

The US Dollar (USD) has witnessed a notable decline in recent months, shedding approximately 4% against a basket of six major currencies in 2025. Analysts attribute this downturn to increasing trade tensions following tariff policies enacted by President Donald Trump. Coupled with growing economic uncertainties, this trend has led to a rare simultaneous drop in both the dollar and US equities, unsettling investors.

One major consequence of the dollar’s depreciation is the impact on European investors in US stocks. While the S&P 500 has dropped around 4% in dollar terms, the weakening dollar has magnified this loss to almost 8% when measured in euros. As a result, European investors are rethinking their positions in US assets and seeking alternative investment opportunities.

For more insight into the broader economic implications of the USD decline, check out [Financial Times’ analysis] on how this trend impacts Wall Street.

Emerging Currency Trends: Argentine Peso and Swiss Franc

In Argentina, President Javier Milei’s economic reforms have strengthened the Argentine Peso (ARS), leading to a 30% surge in imports. The improved peso value has prompted a rise in purchases of essential goods, solar cells, and agricultural machinery. However, this increased demand for imports has strained the country’s foreign currency reserves, contributing to a current account deficit since June.

Meanwhile, the Swiss Franc (CHF) has experienced stability as the Swiss National Bank (SNB) reduced its foreign currency interventions dramatically. After spending 132.9 billion francs in 2023, the SNB scaled back to just 1.2 billion francs in 2024. The SNB’s policy shift towards using interest rates as the primary tool for managing inflation, which remained at 1.1% last year, reflects a cautious yet strategic approach.

For a deeper dive into how central banks are handling inflation, check out this Reuters article.

Global Perspectives and Future Outlook

The global currency market remains sensitive to geopolitical developments, particularly with ongoing debates among European allies about the potential seizure of $300 billion in frozen Russian assets to support Ukraine. As international policy discussions continue, the US dollar’s position as the dominant global reserve currency is also under scrutiny. While the dollar’s status remains robust due to its liquidity and the US economy’s scale, recent policy choices have sparked concerns about its long-term dominance.

In conclusion, the foreign currency market in March 2025 remains dynamic, shaped by economic reforms, policy decisions, and international conflicts. Investors should remain vigilant and consider both currency risks and geopolitical factors when planning their strategies.