Goldman Sachs analysts predict a potential surge in the US dollar that could hinder BRICS’ efforts to reduce reliance on the greenback.
Strategists Karen Reichgott Fishman and Lexi Kanter argue that tariffs likely under a Trump administration would tend to strengthen the dollar, making long positions on USD assets particularly attractive to investors.
Although protectionist measures can push inflation higher, they are also expected to lift US yields, which in turn would increase demand for the dollar. BRICS nations—many of which have pursued strategies to challenge the dollar’s dominant reserve status—now face mounting challenges as several local currencies continue to weaken against the USD.
The report warns that the BRICS de-dollarization agenda could stall for the next several years if trade tensions intensify and tariff barriers rise, creating a difficult environment for efforts to shift global payments and reserves away from the dollar.
Analysts emphasize that currency dynamics depend on a range of factors, including monetary policy, interest-rate differentials, and global risk sentiment. If US yields remain elevated while other central banks pursue looser policy, that interest-rate gap would further support dollar strength. In such a scenario, central banks and governments within BRICS may find it more costly to promote their own currencies for international trade and settlement.
Market observers note that a stronger dollar can amplify certain pressures for emerging-market economies, raising the cost of servicing dollar-denominated debt and potentially limiting available policy space. For BRICS members intent on building alternatives to dollar-dominated systems—such as expanding local-currency trade settlements, creating new payment arrangements, or increasing gold and non-dollar reserves—a prolonged period of dollar appreciation would complicate implementation and slow momentum.
However, the outlook is not predetermined. Currency trajectories respond to shifts in fiscal policy, geopolitical developments, and central-bank decisions. Should inflationary pressures ease, or if other economies tighten policy to raise yields, the dollar’s advance might moderate. Similarly, coordinated efforts among BRICS countries to deepen financial cooperation, enhance local currency liquidity, and reduce transaction frictions could preserve some progress toward de-dollarization even in a stronger-dollar environment.
In summary, Goldman Sachs’ view highlights a credible scenario in which US policy and market responses drive dollar strength, creating headwinds for BRICS’ de-dollarization ambitions. Still, the ultimate outcome will depend on how monetary and trade policies evolve globally and how successfully BRICS members implement practical, resilient alternatives to dollar reliance.