The Fitch Ratings’ latest FX Market Monitor report has noted that major world currencies have appreciated against the US dollar since the beginning of 2025, despite the sharp rise in US tariffs.
Fitch reveals that developed market currencies, excluding the Australian dollar, have gained an average of 4.5% since the end of 2024.
It is mostly attributed to market concerns that rising US tariffs could weigh on the country’s economic growth, which has had a greater influence on the dollar’s value than expectations of a reduced trade deficit.
Moreover, emerging market currencies have seen more varied movements, making the Russian ruble surge by approximately 30%, with notable gains also recorded for the Brazilian real and the Polish zloty. In contrast, the Turkish lira and Indonesian rupiah have weakened.
Since January 2023, the Japanese yen has dropped 12% against the US dollar, while the euro and Swiss franc have appreciated by 2.7% and 7%, respectively.
Among emerging markets, the Turkish lira has seen the sharpest decline, with its exchange rate roughly doubling in lira per dollar. Meanwhile, the Korean won and Indonesia rupiah have fallen by 15% and 7.5%.
Looking at nominal effective exchange rates (NEER), which reflect trade-weighted averages of bilateral exchange rates, Fitch noted that the US dollar’s NEER remained near a multi-decade high after a steady climb from 2015 to 2024.
Switzerland’s NEER is close to a historic peak, while the euro’s NEER has eased slightly from its summer 2024 record. Japan and the UK, however, have seen steep declines in their NEERs compared to 2000—down by 26.5% and 15.8%, respectively.
The report said, of the 20 emerging market economies tracked by Fitch, only China and Poland have recorded NEER gains since 2000.
