How to leverage volatility in late 2025: OANDA TMS analysts’ forecasts

In 2025, financial markets once again proved that a rebound follows every sharp market drop—provided that economic fundamentals remain sound. The spring correction, triggered by the trade war and new tariffs , richly rewarded investors who maintained a pro-risk stance. Entering Q4, the key is not to avoid shocks, but to understand cycles and harness volatility as an ally.

Global Outlook: the shift in Fed's narrative and US strength

For the first time in nine months, the US Federal Reserve (Fed) cut interest rates by 25 basis points, bringing the federal funds target range to 4.00–4.25%. This marks a symbolic shift in the Fed's communication, pivoting from fighting inflation to protecting the job market. This "risk management rate cut" is aimed at maintaining stability, not aggressively stimulating growth.

Key risk: hidden inflation due to tariffs

Rising US tariff revenues under the Trump administration could stabilize at approximately $400 billion annually. Although American importers formally pay the duties, pressure is mounting to pass these costs on to consumers. The inflationary effect of tariffs is increasingly visible, with imported goods prices on the rise. It is estimated that tariffs alone could raise consumer prices by about 1%, with roughly 0.7% of that increase still pending realization. This suggests the Fed may be underestimating the inflation risk.

Stocks and currencies: what's gaining and what's trailing?

Developed markets

• United States (USA): Equity market prospects remain very strong, underpinned by the development of artificial intelligence, high liquidity, and robust corporate fundamentals.
• Japan: Corporate reforms and the return of inflation are supporting the local market. The Yen's tendency to strengthen during global uncertainty makes unhedged investments particularly attractive.
• Europe/UK: These markets are recovering at a slower pace. Europe sees opportunities in the financial and defense sectors. The UK continues to struggle with inflation exceeding the central bank's target.

Currencies and the EUR/USD Outlook

• Euro (EUR): The European Central Bank (ECB) is likely to keep interest rates unchanged as inflation stabilizes near its target and economic indicators improve.
• Dollar (USD): The dollar is under pressure due to the rising probability of deeper Fed rate cuts, concerns about a loss of central bank independence, and overvaluation relative to Purchasing Power Parity (PPP).
• EUR/USD Forecast: The interest rate differential between the US and the Eurozone is expected to narrow, favoring the Euro. A realistic forecast is a rise to around 1.22 by the end of the year.

Precious metals and commodities: time of a safe haven

The precious metals market is experiencing a strong rally.

• Gold: Reasserts its role as a safe haven, hitting a historic high above $4,000 per ounce following the US government shutdown. Strong inflows into physical Gold ETFs confirm the capital rotation towards defensive assets.
• Silver and platinum: Show the greatest medium-term growth potential. Silver benefits from industrial demand (renewables, automotive) and rising ETF holdings. Platinum, despite its dependence on industrial recovery, remains in a persistent supply deficit, creating solid foundations for further price appreciation.
• Brent Crude Oil: Downward pressure on prices is expected due to the risk of oversupply. OPEC+ is increasing production faster than demand is rising. The base-case scenario is a level of around $65 per barrel by the end of 2025.
• TTF Gas: The market enters the heating season with prices near year-to-date lows. Supply constraints from Norway and potential demand surges due to winter weather could drive prices up to around €40/MWh.