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Forex and Interest Rate Outlook - December 2025
- Global economy has proven to be robust in 2025 despite ongoing geopolitical uncertainty.
- US growth increasingly imbalanced toward AI investment, with the consumer and labour market weakening.
- Fed and Bank of England set for further cuts as the ECB sits on the sidelines. Bank of Japan pivoting towards a hawkish stance.
- Dollar set for weakest year since early 2000s but currency has regained some lost ground during Q4 2025.
- Further modest upside for euro, while sterling could remain on the defensive amid a challenging macro environment.
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