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It could if there were context.
"Der Hund hat Durst. Er trinkt Wasser," = "The dog is thirsty. It is drinking water."
"Der Wagen geht nicht mehr. Er ist kaputt." = "The car doesn't go anymore. It is broken."
Unless it's clear from the context that a pronoun refers to something you would give a different gender in English, you should use the gender from the German in your translation.