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The year just gone was a tumultuous one in plenty of respects. And yet, implied FX volatility ends 2025 near all‑time lows on many measures. The return of Donald Trump to the White House and the escalation of trade tensions set the tone for a volatile first half. But as 2025 progressed, the world’s major central banks largely completed their easing cycles and fiscal policies took centre stage. By Christmas, investors were once again selling volatility and rotating into carry trades; the broad dollar fell more than 9% and global equity markets recovered after an April panic. Looking ahead, we expect geopolitics, tariffs, and fiscal policy to be key themes for FX markets in 2026. As we see it, this backdrop should favour a modest increase in volatility, but with growth-sensitive currencies likely to outperform, leaving the dollar to weaken yet again after a disappointing 2025 for the buck.
Read our Monex Macro Outlook 2026 here:
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Authors:
Nick Rees, Head of Macro Research
Barry van der Laan, Senior FX Market Strategist
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