Risks and Opportunities of Dollar Investment in 2025: Exchange Rate Forecast and FX Trading Guide

The first half of 2025 is a period marked by extremely high uncertainty in the global economy. Especially, exchange rate forecasts are the first step toward successful investment, but relying solely on historical patterns is insufficient. The strengthening of protectionist policies in the US, the spread of global retaliatory tariffs, and Middle Eastern geopolitical risks are all interacting complexly, causing the won-dollar exchange rate to surpass 1,470 won, with possibilities of exceeding 1,500 won in the second half.

In such an uncertain market, what preparations should individual investors make? This article analyzes the exchange rate forecast scenarios for 2025 and introduces ways to respond to the highly volatile market through FX margin trading.

Why is the won-dollar exchange rate so volatile in 2025?

Looking at patterns in history

Over the past 20 years, the won-dollar exchange rate has surged systematically during global crises. It exceeded 1,500 won during the 2008 financial crisis, and in early 2020, amid COVID-19, it recorded a weakening trend due to dollar preference. However, since 2022, the situation has changed. Aggressive US interest rate hikes, concerns over global inflation, and the current protectionist measures in 2025 have pushed the exchange rate close to an all-time high.

Current shock factors

Trump administration’s tariff policies: The US imposes a basic 10% tariff on all imports, with additional tariffs on countries like China. Countries such as China, the European Union, and India respond with retaliatory tariffs, escalating global trade tensions.

Surging dollar demand: As recession fears grow, demand for the safe-haven dollar increases. This automatically exerts downward pressure on emerging market currencies, including the won.

Deteriorating profitability of Korean export companies: While a higher won-dollar rate can temporarily improve Korea’s export competitiveness, the overall decline in global demand may lead to a reduction in exports themselves.

Exchange rate scenarios for the second half of 2025: three key variables

Divergence in interest rate policies

The US Federal Reserve faces a dilemma. On one side, there’s the need to maintain high interest rates to curb inflation; on the other, concerns over rising prices and economic slowdown due to tariffs. If interest rates are maintained or raised, the dollar will likely remain strong in the short term. Conversely, if the economy slows further, there’s a possibility of rate cuts, which could mark the peak of the exchange rate.

Exchange rate forecast: High volatility is expected until the interest rate decision is made.

Global economy and Korea’s countermeasures

The IMF and OECD warn of a global economic slowdown due to the ripple effects of tariff policies. However, positive signals such as recovery in semiconductors and increased exports of electric vehicle parts in Korea also exist. If these industries outperform expectations, they could serve as defense factors for the won.

Expert scenarios

Hana Bank predicts the exchange rate could rise to 1,490 won due to policy uncertainty. iM Securities’ expert team mentions the possibility of surpassing 1,500 won if domestic political uncertainty persists. Shinhan Bank’s research team also stated that if political chaos worsens, their forecast for the exchange rate should be adjusted upward to over 1,500 won.

What is FX margin trading: the secret to big trades with small capital

Basic concept of margin trading

There are various ways to trade dollars in the foreign exchange market, but FX margin trading involves depositing only a portion of the total transaction amount, borrowing the rest from a broker. For example, with 1:100 leverage, you can trade $100,000 with just $1,000.

Unlike regular forex trading, which requires full payment at purchase, margin trading allows trading with only the margin deposit. This maximizes capital efficiency but also carries the risk of larger losses.

Key advantages of FX margin trading

1. Expectation of large profits with small capital: Using leverage, small investors can respond swiftly to market fluctuations.

2. 24-hour trading: The global forex market is open around the clock, allowing entry and exit at any time. This means immediate response to economic indicators and global news.

3. Flexibility in pair trading: Trading in currency pairs like USD/KRW enables profit opportunities both in rising and falling dollar markets.

4. High liquidity: With daily trading volumes exceeding $4 trillion, slippage( and execution at unexpected prices) are minimized.

The other side: risk factors

Margin trading amplifies losses when the market moves against your position. Therefore, thorough stop-loss settings and position management are essential. In highly volatile markets, losses can reach hundreds of thousands of won within a single day.

Choosing a reliable broker: half the success

Key features of major brokers

IG: Regulated by FCA, ASIC, etc., with abundant professional analysis tools. Suitable for experienced investors but may be complex for beginners.

OANDA: Low trading fees, precise order system, friendly customer support—popular among long-term investors and algorithmic traders.

Saxo Bank: Offers advanced features and broad asset access but has a high minimum deposit, mainly targeting professional investors.

CMC Markets: Provides advanced charting, low spreads, and rich educational resources, ideal for active traders.

Mitrade: User-friendly interface, low entry barriers, competitive spreads, suitable for beginners and short-term investors, with strong mobile trading.

Four checkpoints for broker selection

Regulation level(Foundation of stability), fee structure(Impact on actual returns), platform stability(Reliability of trade execution), customer support(Prompt response to issues)—balancing these four factors helps establish a stable trading environment.

Successful FX trading strategies

Fundamental vs technical analysis

Fundamental analysis examines macroeconomic indicators such as interest rates, employment data, consumer prices, and GDP to determine the medium- to long-term currency direction. Technical analysis uses chart patterns and indicators(RSI, MACD, moving averages) to identify short-term buy/sell timing.

In uncertain times like 2025, combining both analyses is effective. Understand the overall trend through fundamental analysis and refine entry timing with technical analysis.

Risk management: more important than investment

Limit position size: Set a rule to invest only 2-5% of total capital per trade.

Set stop-loss: Predefine automatic exit points if the market moves against expectations.

Adjust leverage: Lower leverage in volatile markets; gradually increase as experience and capital grow.

Keep a trading journal: Record reasons, results, and lessons from each trade to reduce repeated mistakes.

Psychological control: calmness is assets

Emotional decisions are the biggest enemy of trading. Consistently follow your planned trading rules, and train yourself not to shake your initial strategy even after losses. Maintaining a long-term plan despite short-term volatility leads to long-term profits.

How to prepare for won-dollar exchange rate investment in 2025

Summary of current situation

The won-dollar exchange rate has exceeded 1,470 won, with the possibility of surpassing 1,500 won in the second half. This is the highest level since the 2008 financial crisis. In this environment, exchange rate forecasts become even more critical.

Rebuilding investment strategies

Prioritize market analysis and conservative asset allocation over short-term profit pursuit. FX margin trading allows access to the dollar market with small capital, but caution is essential given high leverage and volatility.

Three key elements of success

1. Choosing a trustworthy broker: Select a regulated broker and find a platform suited to your investment style.

2. Systematic analysis and strategy development: Combine fundamental and technical analysis to create a trading plan.

3. Risk management and emotional control: Limit position sizes, set stop-losses, and keep a trading journal to sustain long-term performance.

Conclusion: Opportunities within uncertainty

2025 will be a year of extreme fluctuation in the exchange rate market, driven by global protectionism, interest rate policy changes, and geopolitical risks. The won-dollar rate is moving near historical highs, and this uncertainty significantly amplifies short-term volatility.

In such an environment, individual investors’ options are limited. However, with thorough market analysis, appropriate trading tools(FX margin), and rigorous risk management, volatility can be transformed from a risk into an opportunity.

While exchange rate forecasts cannot be perfectly accurate, understanding market trends and preparing to respond is possible. To survive and grow in the dollar market in 2025, focusing on stability and sustainability in your strategy is the most prudent choice.