Economy: the dollar dynamited by the Trump administration

It’s better to expect the worst to avoid a difficult tomorrow. Every year, Saxo Bank strategists publish a list of extreme economic and geopolitical scenarios for the coming year. These are not forecasts strictly speaking. We are talking about political fiction, events that are certainly improbable, but likely to cause violent movements in the financial markets.

However, these extreme forecasts were sometimes proven right. In 2015, the bank predicted that a referendum to leave the European Union would be launched in the United Kingdom and that it would be accepted by the British. Well seen!

Last year, the establishment predicted that anti-vax Robert F. Kennedy Jr. would triumph in the American presidential election. Although he did not win, the latter has just been appointed Minister of Health by President Trump. We’re not far from the mark, then.

Focus on four shock forecasts for 2025.

The dollar dynamited by Trump

The return of Donald Trump rhymes with protectionism. And the dollar will suffer. In 2025, the greenback will fall by 20% against other currencies and by 30% against gold. At the same time, the value of cryptocurrencies will quadruple and cross the $10,000 billion mark. Therefore, bitcoin could exceed 400,000 dollars next year (editor’s note: against nearly 100,000 dollars currently).

For what? The new American administration will impose massive customs duties on products imported into the United States and at the same time reduce the public deficit thanks to the action of the Department of Government Efficiency (DOGE) led by Elon Musk. This will mean fewer dollars for Washington to issue to finance itself.

“The consequences for the US dollar are disastrous for global trade, as the supply of dollars needed to power the cogs of the system based on this currency is interrupted, which, ironically, risks causing a sharp rise in the greenback. Instead, global financial players are looking for other solutions and safety valves are being found,” writes John J. Hardy, Saxo Bank’s chief strategist. In response, the Swiss franc appreciated to less than 75 cents to the dollar (editor’s note: against 0.90 currently).

A printed organic heart is a game changer

The lives of millions of people will be extended in the years to come thanks to a major discovery. In 2025, researchers will succeed in printing a transplantable human heart using 3D bioprinting technology. Once printed, the organ is placed for several weeks in a bioreactor reproducing the living conditions of the human body, allowing it to prepare (connection of blood vessels, electrical pathways) to be transplanted. “This advance paves the way for extending human longevity by making it possible to replace failing organs with tailor-made and fully compatible organs,” predicts Koen Hoorelbeke, head of investment at Saxo Bank.

In stock market terms, the biotechnology and 3D printing sectors are exploding.

OPEC disappears from the radar

The electrification of transport sounds the death knell for OPEC, whose 13 member countries extract nearly 35% of the oil consumed in the world, and for its production quotas supposed to support the price of a barrel. Because two thirds of the black gold consumed on the planet runs the engines of cars and trucks. And everything happens very quickly. In China, for example, the share of electric vehicles sold reached 45% of total sales in September 2024. “This is around six years earlier than expected,” observes Ole Hansen, head of raw materials strategy at Saxo. Bank. Peak oil consumption is then reached in 2025, with demand declining in the following years.

This will mean collapse for OPEC, already in 2025. “While some members are cheating on production quotas to grab what revenue they can and export demand is falling, a majority of them are quickly realizing that there is no longer any nothing to do,” predicts the strategist. Important members are leaving the organization which is “thus relegated to the dustbin of history”.

All this causes a collapse in the price of oil, which will, however, eventually stabilize, “as higher-cost suppliers, particularly in North America, stop costly shale oil production.” In short, we breathe better.

Bankruptcy of a major insurer

In 2025, the insurance sector is in bad shape. A catastrophic storm and rainfall devastates the United States. All this is linked to climate change and atmospheric warming which are leading to an intensification of the water cycle on earth. As a result, the damages observed are “several times greater than the 40 billion dollars in compensation linked to Hurricane Katrina in 2005”, envisages John J. Hardy.

Caught in turmoil, a large American insurance group is threatened with bankruptcy. Its reserves are insufficient to cover losses, “and reinsurance is inadequate to mitigate the costs of this extreme event.”

In response, insurers will have to sharply raise their rates for natural disasters, “which has the effect of significantly lowering the value of real estate in many housing markets”. To be confirmed, all that.

“Latest news”

Want to stay on top of the news? “Tribune de Genève” offers you two meetings per day, directly in your email box. So you don’t miss anything that’s happening in your canton, in Switzerland or around the world.

Other newsletters

Log in

Nicolas Pinguely has been a journalist in the economic section since 2018. A specialist in finance, he has worked in the past for Bilan magazine, at Agefi and at Le Temps. He has also held various positions in banks and financial companies, particularly in microfinance. More info

Did you find an error? Please report it to us.

11 comments