Leading investment bank JP Morgan is closely monitoring the de-dollarization initiative kick-started by BRICS to topple the US dollar. After Trump’s ascension to the White House, the DXY index has fallen to a new low of 98 this year. Local currencies are racing ahead in the forex markets while the greenback is reeling under macroeconomic pressures. An influx of forex traders taking entry positions in local currencies is increasing for the first time in decades.

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BRICS: US Dollar Could Face Another 10% to 20% Decline, Says JP Morgan

Political instability and the relentless de-dollarization pursuit of BRICS can trim the US dollar’s market share, says JP Morgan. The leading global bank wrote in its latest research piece that the US dollar could decline by another 10% to 20%. The DXY index is hovering around the 101 mark on Tuesday and is attracting bearish sentiments.

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A decline of 10% in the US dollar’s DXY index could make it plummet to the 90 range. If the 20% dip forecast turns accurate, then the US dollar could plunge to a low of 80, which is worrisome to the economy. BRICS is adding more pressure on the US dollar’s prospects that could make things worse for the currency, wrote JP Morgan.

“The dollar’s longstanding overvaluation is beginning to unwind, which could result in a 10%–20% decline against major peers such as the euro and Japanese yen over the medium-term. We don’t see this as a breakdown in the dollar, but it is a reset,” wrote JP Morgan on the US currency amid the BRICS onslaught.

Also Read: De-Dollarization Gains Momentum: 50+ Countries Abandon US Dollar Dominance

JP Morgan is ringing the warning bells from the day BRICS began a concentrated effort to topple the US dollar. The alliance of developing nations wants to distance itself from the USD and strengthen its local currencies instead. They are mostly being successful in the ideology, and the next decade could be different from this one.