In a scenario where the hegemony of the dollar has been questioned, the countries that make up the BRICS+ -Brazil, Russia, India, China and South Africa, the founding nations of the association-, have ignited the debate by raising the possibility of a common currency. This not only challenges the status quobut could also reshape the dynamics of global trade.

During its last summit in October, the group presented a prototype banknote as a symbol of this aspiration. Is it a step towards true monetary diversification or just a political statement?

An immediate response

From the other side of the board, Donald Trump, the president-elect of the United States, was quick to react. His warning: 100% tariffs if the BRICS+ move forward with the creation of their currency. A response that reflects the strategic importance of the dollar as a tool of economic influence.

Meanwhile, the Kremlin countered that such measures could accelerate the shift away from the dollar in international trade.

In the face of these cross declarations, it is valid to question who will come out on top in this struggle.

What does this mean for the markets?

For investors, this conflict raises key questions, such as:

• Emerging markets under pressure: Local currencies of emerging countries could experience higher volatility if they are perceived as tools in this geopolitical game.
• Commodity commodities: Since many commodities are traded in dollars, an attempt to diversify currencies could affect prices.
• Impact on capital flows: A shift in confidence in the dollar could alter global investment decisions, favoring assets in alternative currencies.

Is a post-dollar world possible?

Although the creation of a BRICS+ currency seems distant, due to the internal economic and political differences within the bloc, the mere fact of considering it underscores a global trend towards a more multipolar system.

For investors, this is a call to monitor how these movements could impact diversification strategies and foreign currency exposure.

In short, we are facing a financial world in transition.

At Fynsa, we remain attentive to these developments and their potential implications for our portfolios and recommendations. Tensions between the dollar and emerging alternatives could open new opportunities or - failing that - challenge traditional strategies.

Is the challenge to the dollar a threat or an opportunity? We will see how things turn out; in any case, we will be sure to keep you always informed.

Juan Manuel Alessandrini

International Funds Analyst Fynsa AGF