JPMorgan projects the US dollar will fall about 3% by mid-2026 as expected Federal Reserve easing and a BRICS move away from dollar-based trade lower demand. The bank cites softer labor markets and growing use of national currencies within the BRICS bloc as main reasons.
Meera Chandan and Arindam Sandilya lead the currency team behind the forecast and keep a net bearish stance for 2026. “Our outlook for 2026 remains net bearish, though the expected decline is smaller and more uneven than the weakness we foresee for 2025.”
The strategists say they would flip to a bullish view if US data stops Fed easing and boosts growth. They warn stronger growth could remove the Fed’s dovish bias.
As stated by David Kelly, “This should allow the dollar to resume its decline, albeit at a slower pace than in early 2025.” Robust US growth and sticky inflation could still limit dollar losses.
The BRICS de-dollarization push is accelerating, with Russia and China settling roughly 90% of trade in local currencies and BRICS Pay cutting intra-bloc dollar use by about two-thirds. Initiatives include a BRICS Unit, CBDC interoperability, New Development Bank local currency loans, and links between SPFS, CIPS, and UPI (Ed. note: this infrastructure aims to reduce reliance on dollar networks).
S. Jaishankar clarified the bloc’s stance, saying “I don’t think there’s any policy on our part to replace the dollar. The dollar as the reserve currency is the source of global economic stability, and right now what we want in the world is more economic stability, not less.”
JPMorgan views the dollar’s slide as gradual rather than a sudden collapse and warns of possible disorderly moves. “we expect the dollar to continue to weaken gradually, although some scenarios could lead to more disorderly moves”
