- JPMorgan forecasts the US dollar will fall about 3% into mid-2026 amid expected Federal Reserve easing.
- Bank strategists cite labor market softness and shifts into higher-yielding currencies as drivers of dollar weakness.
- JPMorgan would reverse to dollar bullishness if stronger economic data halts Fed easing.
- The BRICS de-dollarization push—including reduced USD use via BRICS Pay and new payment links—adds sustained downward pressure.
- JPMorgan views the decline as gradual and stepwise, with robust U.S. growth or sticky inflation able to limit losses.
JPMorgan projects the U.S. dollar will drop roughly 3% into mid-2026 as the Federal Reserve moves toward policy easing and BRICS nations reduce dollar use. The bank’s currency strategists, led by Meera Chandan and Arindam Sandilya, attribute the expected decline to labor-market softness and flows into higher-yielding currencies.
The strategists said they remain negative on the dollar for 2026 but would change stance if economic indicators stop the Fed’s easing. “Our outlook for 2026 remains net bearish, though the expected decline is smaller and more uneven than the weakness we foresee for 2025.” They added that stronger data that removes the Fed’s dovish bias would make them “decisively bullish.”
J.P. Morgan Asset Management Chief Global Strategist David Kelly noted the decline should continue at a slower pace than in early 2025. “This should allow the dollar to resume its decline, albeit at a slower pace than in early 2025.” The firm also warned that solid U.S. growth and persistent inflation could cap how far the greenback falls.
The BRICS currency shift is reinforcing downward pressure on the dollar. Russia and China now settle about 90% of their trade in local currencies such as rubles and yuan, and BRICS Pay has cut USD use in intra-bloc trade by roughly two-thirds. Indian External Affairs Minister S. Jaishankar emphasized the bloc does not aim to replace the dollar, saying the currency supports global stability. “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.”
Russian President Vladimir Putin described the move as pragmatic. “We are not refusing, not fighting the dollar, but if they don’t let us work with it, what can we do? We then have to look for other alternatives, which is happening.” BRICS initiatives—such as a BRICS Unit, CBDC interoperability work, and New Development Bank local-currency lending—aim to link systems like SPFS, CIPS, and UPI, creating payment channels outside dollar-dominated networks. JPMorgan sees these shifts as part of a gradual reconfiguration rather than an immediate replacement of the dollar.
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