BRICS De-Dollarization Efforts Prompt Citi Bank to Forecast US Dollar Decline

Citi Bank has projected a potential decline in the US dollar, attributing this forecast to the growing influence of BRICS (Brazil, Russia, India, China, and South Africa) and their de-dollarization initiatives. The bank’s latest analysis suggests that the US dollar may experience a downturn in the coming months, as the BRICS alliance persuades developing countries to reduce their reliance on the currency.

Currently, the DXY index, which measures the performance of the US dollar against a basket of major currencies, stands at 101.40. This marks a significant drop from 106.20 in June of this year. The forecasted decline aligns with the BRICS bloc’s efforts to challenge the US dollar’s dominance as the world’s primary reserve currency.

Citi Bank anticipates that BRICS currencies could slightly outperform the US dollar over the next two months. The bank’s analysts also caution that major currencies such as the Euro and Pound might experience declines in tandem with the US dollar due to global economic uncertainties. The report highlights concerns about the Euro’s growth potential, suggesting it could lag amid the ongoing economic challenges.

Despite the short-term bearish outlook for the US dollar, Citi Bank remains optimistic about its long-term prospects. The bank predicts a possible recovery towards the end of the year, supported by expectations of a US recession and a potential shift in European Central Bank (ECB) policies.

In summary, while Citi Bank foresees a decline in the US dollar in the near term due to BRICS’ de-dollarization push, it maintains a bullish stance on the currency’s long-term outlook, anticipating a rebound later in the year.