The financial markets are characterized by uncertainty. This is also reflected in the performance of the so-called C3 currencies (Polish Złoty, Czech Koruna and Hungarian Forint), but also in other currencies such as the Rouble and the Turkish Lira. A look at the macroeconomic drivers and political influences gives us an insight into the underlying dynamics.
Stability of C3 Currencies – a Differentiated Picture
The C3 currencies are currently experiencing a phase of relative stabilization. While the Polish złoty (PLN) and the Czech koruna (CZK) are showing signs of recovery, the Hungarian forint (HUF) is an exception as it continues to depreciate. This development reflects not only economic but also political uncertainties in Hungary, which are weakening investor confidence. The divergent development within the C3 group underlines the need to look at these currencies individually rather than evaluating them as a whole.
The Rouble: A Temporary Slump
The Russian rouble has moved dramatically over the past four weeks, with a short-term slump of 15% against the euro and US dollar. However, this depreciation was corrected just as quickly. The volatility of the rouble can be partly explained by the low trading volume, which favors extreme price swings. Without reliable data, it is difficult to analyze the cause of such movements, but they underline the inherent fragility of the ruble in an environment characterized by political and economic uncertainties.
The Turkish Lira: A Proxy Currency for the US Dollar?
The Turkish lira (TRY) is increasingly becoming a mirror image of the US dollar exchange rate. The dynamics of the USD/TRY dominate the development of the lira, and the continuous rise of the USD/TRY reflects the structural weakness of the lira. It is worth noting that despite allegations of manipulation on the foreign exchange market, no massive depreciation of the lira is expected in the short term. However, a scenario could develop in the first half of 2025 that leads to significant price movements. The lira’s dependence on USD dynamics raises fundamental questions about the sustainability of Turkish monetary and economic policy.
The Influence of the US Dollar: A Key for 2025
The global currency landscape continues to be strongly influenced by the US dollar.The economic policy measures announced by the US, such as tax cuts and protectionist tariffs, could further reinforce the strength of the US dollar. A strong US dollar acts as a magnet for capital from abroad and strengthens the US economy through consumer incentives and positive stock market developments. However, this USD strength has mixed effects on the currencies in Eurasia: while export industries could benefit, currencies with high inflation suffer from additional devaluation pressure.
A Look Ahead to 2025: Potential and Risks
The coming years will be characterized by a growing discrepancy between theoretical economic models and real market movements. Higher interest rates, which have a stabilizing effect in theory, can be undermined in the long term by rising inflation rates. Conversely, low interest rates coupled with low inflation could signal stability and confidence in a currency. The exaggeration of fundamental indicators, particularly in the USD area, suggests that there could be an adjustment towards the end of 2025 that addresses existing imbalances.
Conclusion
An analysis of global currency developments shows how closely economic, political and structural factors are interwoven. While some currencies such as the euro or the C3 group are stabilizing, the situation with the rouble and lira remains fragile. The strength of the US dollar will continue to play the central role in 2025, with overvaluation necessitating adjustment processes in the long term. Investors and observers should prepare themselves for an exciting year that could be characterized by adjustments and possible price corrections.
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