Goldman Sachs examines the resilience of the U.S. dollar’s dominance in global finance alongside a forecast for continued currency depreciation. The analysis finds little evidence of structural de-dollarization, but highlights that the U.S.’s narrowing growth advantage, trade barriers, and rising fiscal deficits are likely to weaken the dollar’s valuation in the near term.
Dollar Dominance and Dollar Depreciation — Moving on Different Tracks (Trivedi/Jenkins)
Goldman Sachs
Kamakshya Trivedi, Stuart Jenkins
Research
16 Pages
Key Takeaways
Limited de-dollarization: The dollar still accounts for roughly 50% of global transactions and 60% of reserves, with minimal structural decline.
Macro-driven weakness: A 4% trade-weighted depreciation is expected as slower growth and capital inflows reduce support for the currency.
No viable alternative: Despite diversification attempts, neither the euro nor renminbi offers the liquidity, scale, or institutional strength to replace the dollar.
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