PERSPEKTIVEN To Go – der Börsenpodcast · Deutsche Bank

2025: das Jahr der Dollar-Debatte

·25 min·2 clips

Why did the dollar lose over 10% against the euro this year, and what does it mean for investors?

1. Perspektiven2go, presented by Deutsche Bank, features host Jessica Schwarzer interviewing Dirk Steffen about why the US dollar weakened significantly in 2025 and what it means for investors. 2. Dirk Steffen is Deutsche Bank's currency strategist and a recurring guest on the show; Jessica Schwarzer is a financial journalist who hosts the podcast. 3. The episode's core question is whether the 2025 dollar weakness represents a structural shift or a temporary dislocation — and what investors should do with currency exposure in their portfolios. 4. The dollar reached its weakest point against the euro in mid-September 2025, having fallen over 10% from a January level of approximately 1.023; Steffen notes the decline was concentrated in the first half of the year before stabilising. 5. Steffen contextualises the move against the September 2022 level of approximately 0.95, arguing that much of the 2025 weakness is a normalisation from an extreme dollar strength, not a new structural collapse. 6. Unlike typical currency analysis focused on interest-rate differentials, Steffen says 2025 was a year when the market did not act on rate differences but on two other factors: US political communication and equity market dynamics. 7. The US administration's rhetoric — including explicit calls for a weaker dollar, discussion of converting Treasuries into 100-year bonds, and perceived threats to Federal Reserve independence — weighed on dollar sentiment throughout the year. 8. The DeepSeek announcement on January 20th, US inauguration day, triggered sudden fears of a loss of US artificial intelligence dominance and prompted a rotation from US tech stocks into European industrial and banking equities. 9. Capital outflows from US assets reversed following Liberation Day on April 2nd, and Steffen notes that domestic American investors did not reduce US equity holdings, suggesting foreigners drove the initial shift. 10. On currency hedging, Steffen calculates that EUR-hedged S&P 500 products have cost approximately 1.7% per year over 25 years, reducing the approximately 2.5% average annual dollar gain from US equities down to roughly 0.7-0.8% net — making hedging questionable for long-term investors. 11. The dollar's share of global currency reserves has declined to 56.1%, the lowest in 30 years, while the euro has not been the beneficiary — central banks have been accumulating gold instead. 12. Steffen attributes this structural reserve shift to decades of strong Asian economic growth requiring more diversified reserve management, and to commodity trade increasingly settled in Chinese renminbi rather than dollars. 13. Kenneth Rogoff, former IMF chief economist, is cited for his book 'Our Dollar, Your Problem', which predicts a tripolar international currency system of dollar, euro, and yuan, potentially with gold as a fourth pillar. 14. Steffen argues dollar dominance has been costly for smaller economies that were forced to import US monetary policy cycles misaligned with their own domestic conditions. 15. Among emerging-market currencies in 2025, the Argentine peso lost 35% against the euro, the Turkish lira fell 25%, and the Indian rupee and Indonesian rupiah each fell around 13% to 13.5%. 16. Eastern European currencies — Polish zloty, Czech koruna, Hungarian forint, Bulgarian lev — outperformed the euro in 2025, which Steffen links to strong economic ties with Germany through direct investment, supplier networks, and Germany's domestic stimulus cycle. 17. The Swedish krona gained approximately 4% against the euro in 2025, or roughly 14-15% against the US dollar, driven by Sweden's strong manufacturing and export sector, which tracks similar cycles to Germany. 18. The conversation is structured as a Q-and-A interview with Schwarzer asking retail-investor-framing questions and Steffen providing technical but accessible answers; tone is calm and analytical with occasional dry humour. 19. Retail investors seeking practical guidance on managing dollar exposure in a globally diversified equity portfolio would get the most from this episode. 20. Listeners seeking pure macroeconomic theory or in-depth emerging-market analysis rather than a practical portfolio perspective may find the coverage insufficiently deep.

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