Nvidia, economy, dollar… “The 5 questions investors are asking for 2025”

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– Nvidia

Should we fear a devaluation of the yuan to revive the Chinese economy? In the space of two months, the yuan depreciated by 5% against the US dollar. Is the worst yet to come? Many analysts argue in favor of a devaluation of the Chinese currency to revive the economy of the Middle Kingdom. However, the remedy does not seem appropriate. Not only does this risk triggering a currency war but above all it does not seem to be the ideal lever to pull to escape deflation and support activity. China’s trade surplus is around $1,000 billion. He’s probably underestimated. In this situation, a fiscal stimulus is generally prescribed, not a currency depreciation. Unfortunately, this famous relaunch is slow to materialize…

The second question investors are asking is whether EUR/USD (euro/dollar) will reach parity. On December 18, EUR/USD broke the support level at 1.0460, following the US Federal Reserve meeting. Parity is not certain. On the other hand, it is difficult to see what would prevent the pair from falling towards 1.02 in the months to come. The technical analysis argues in favor of this objective, as well as the fundamentals (differential in growth and productivity between the two sides of the Atlantic, capital flows going to be recycled on the American side, etc.). The rise of the dollar does not only occur against the euro. It is generalized. The dollar rose 5% against G10 currencies – a rise that is similar to what was seen in the two months following Donald Trump’s victory in 2016.

Will dedollarization continue?

We keep hearing about the dedollarization process. Moreover, Donald Trump recently warned the BRICS who would like to circumvent the American dollar. But the reality is quite different. According to the latest data from Swift, the US dollar accounts for 49.1% of total international transactions – a 12-year high. We do not see what could derail this basic trend in 2025. It is even likely that the dollar’s share will continue to increase and exceed 50%, to the detriment of the euro, in particular.

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How is the American economy really doing?

The Bloomberg consensus growth forecast has been revised sharply upwards to 2.1%. Meanwhile, the growth gap with the eurozone is widening. It was only 0.3%. It is now 1%. Inflation remains high. It accelerated to 2.7% year-on-year in November. But it is mainly linked to an increase in the prices of eggs and poultry because of avian flu. The disinflation process is not called into question for 2025. It is favored by companies’ less power to set prices, lower consumer spending, measured wage increases and the slowdown in the rise in food prices. real estate and the cost of insurance.

And consumption in all this? Food spending is also slowing, penalizing the restaurant sector and large retailers. But this is because of the success of diabetes treatments that are used to lose weight. Nothing to worry about, therefore. Activity remains sustained and is barely slowing down compared to 2024. The health of the American economy is definitely an economic exception in a world of low growth.

Will Nvidia exceed expectations again?

Nvidia is THE artificial intelligence giant. The evolution of Nvidia shares explains the outperformance of Wall Street compared to European stocks in 2024 and even has an impact on the evolution of the corporate debt market in Europe! It’s a systemic business. Never seen before! The good news is that the year 2025 is looking pretty good for Nvidia. Before the summer, it will launch its new super-powerful Rubin chip which, if it keeps its promises in terms of speed and available memory capacity, should ensure the company’s hegemony for years to come. Rubin, as well as older version chips, are essential for developing AI learning models. This is the keystone of the current revolution.