The slow erosion of the United States dollar’s dominance, rather than a sudden collapse, is expected to be one of the most significant forces shaping global markets in 2026, with oil prices emerging as a key determinant of inflation and economic growth.
This assessment was made by Senior Partner at AB & David Africa, David Ofosu-Dorte, at the firm’s 2026 Crystal Ball event, where he urged businesses and investors to prepare for a period of global economic transition.
“The fall of the U.S. dollar is the single most important event that we ought to be watching,” Mr. Ofosu-Dorte said.
He explained that the weakening of the dollar follows a familiar historical pattern, noting that global economic power has always been driven by a combination of education, technology, infrastructure, and influence. According to him, dominant powers rarely disappear abruptly but instead decline gradually over time.
“Great empires that become great orders or superpowers do not vanish. They fade gradually. Rome was not built in a day — and it did not collapse in a day either,” he stated.
Mr. Ofosu-Dorte noted that the dollar’s share of global reserves has declined significantly, falling from about 90 per cent to roughly 50 per cent, a shift he said is already reshaping capital flows and investor behaviour.
He added that the trend does not point to the emergence of a single replacement power, but rather a more fragmented global economic order.
One consequence of the dollar’s weakening, he said, is the sustained rise in gold prices, driven partly by declining confidence in the currency. He projected that gold could rise to as high as $5,000 and remain elevated through 2026.
He also pointed to a growing shift by investors and central banks toward alternative reserve currencies, including the Swiss franc, Japanese yen, Danish kroner, Canadian and Australian dollars, as well as the euro and the pound. Several countries holding U.S. Treasury bills, he added, are already gradually reducing their exposure.
Despite these trends, Mr. Ofosu-Dorte cautioned against panic, stressing that the dollar remains the strongest currency the world has seen.
“2024, I said it had peaked but would not crash. I pray it doesn’t,” he said.
Turning to energy markets, he warned that oil prices could deliver faster and more disruptive shocks to global economies than currency movements. According to him, oil will be a major driver of inflation in 2026, fuelled by geopolitical tensions.
“Oil prices, in particular, will determine many things. It will go above the $60 market that has been stable throughout,” he said.
He cited potential conflicts between Israel and Iran, ongoing instability in the Middle East, and India’s continued purchases of Russian oil as factors likely to tighten supply and push prices higher, leading to uneven inflation pressures across economies, especially for energy-importing countries.
Mr. Ofosu-Dorte concluded that while changes in the global order often come with economic side effects, including inflation, 2026 is more likely to be a year of recalibration than collapse for global markets.
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